Photo by Louis Hansel on Unsplash
Food & Drink Restaurants

Restaurants are struggling to stay alive, for now, but not everyone will make it through

The struggle is real as restaurateurs contend with limited sales, rental woes, anxious customers, and a possible COVID resurgence. By NANA OZAETA
ANCX | Jul 17 2020

Since the Philippine government announced restaurants and bars would have to shut down their dine-in operations, it has been a roller coaster ride for the industry as restaurant owners, from the small to the large scale, have had to contend with significant losses and an ever-evolving scenario. First, they had to ratchet up their takeout and delivery services, figure out safety protocols, and contend with staffing issues. Then, in the lead up to the reopening of dine-in services in mid-June, they had to figure out how to sanitize their premises, get their staff to work, and assure a worried public that it is indeed safe to dine out again. Then, in the last week, with COVID numbers surging anew, news of hospitals filling up, and the possibility that the virus is airborne, there is yet more uncertainty to contend with. 

Restaurant owners have been on crisis mode since early March, and there is still no end in sight. We spoke with four restaurant owners to get a snapshot of their concerns and outlooks, with the following issues emerging:

Sales could still be better

Among restaurants that cater especially to office workers, business has not been too good, according to Rommel Hinlo of Kuppa Roastery & Cafรฉ in Bonifacio Global City. He reveals, “I just finished computing our average daily sales and it looks grim. We are only doing 6% to 8% compared to our pre-COVID numbers.” Kuppa isn’t located inside a mall, but rather caters to the surrounding office buildings. But most office workers have been staying home. “We did an informal survey with our regulars and most of them are running at 5% capacity,” he reveals.  

Chef Ed Bugia of Mimi & Bros in BGC and Pino, Pipino, and Pi Breakfast & Pies in Quezon City is in a similar situation. He shares, “The 30% [maximum capacity], never iyan napupuno every day. We’re not in malls for the foot traffic.” While his sales went up by just 10% to 20% with dine-in, he has lost much of his walk-in customers which comprise around 90% of sales. “Restaurants were never designed to be just takeout. We’ll not survive,” he says, unless more people dine in.

Stella Sy of Viva Foods, however, gives a different sales outlook. Her restaurant group operates Paper Moon, Botejyu, Wing Zone, Pepi Cubano, and Yogorino, whose branches are mostly mall based. During the enhanced community quarantine (ECQ), her group was already performing at 20% to 30% of pre-COVID sales. “We were very, very aggressive,” she reveals, with sales going up to 50% after two weeks of dine-in operations. 

 
 
 
 
 
 
 
 
 
 
 
 
 

Anata wa jagaimo mo sukidesu ka? Have you tried our Mt. Fuji Fries? Celebrate National Fries Day on July 13, 2020 and savor this crispy and flavorsome fries! For orders, please visit any of our stores or call us at: ๐Ÿ“ Ayala Malls Feliz: 0917-1542295 ๐Ÿ“ Ayala Malls Trinoma: 0917-1105105 ๐Ÿ“ Ayala North Exchange: 0917-1301306 ๐Ÿ“ Estancia: 0917-6238112 ๐Ÿ“ Festival Mall: 0917-1370883 ๐Ÿ“ Fisher Mall (Quezon Avenue):0917-1101108 ๐Ÿ“ One Bonifacio High Street: 0917-1741344 ๐Ÿ“ OSquare 2 (Greenhills): 0917-6322940 ๐Ÿ“ Robinsons Magnolia: 0917-1700581 ๐Ÿ“ SM City Bacoor: 0917-1304304 ๐Ÿ“ SM City Baguio: 0917-1135944 ๐Ÿ“ SM City Dasmariรฑas: 0917-1228288 ๐Ÿ“ SM City Fairview: 0917-1334707 ๐Ÿ“ SM City Lipa: 0917-3186715 ๐Ÿ“ SM City Pampanga: 0917-1102102 ๐Ÿ“ SM Mall of Asia: 0917-6260780 ๐Ÿ“ SM Megamall: 0917-6224357 ๐Ÿ“ Ayala Malls Solenad: 0917-1546384 ๐Ÿ“ Vertis North: 0917-7125740 ๐Ÿ“ Ayala Bay Mall: 0917-1301309 ๐Ÿ“ Greenbelt 3: 0917-7132678 *Subject to 10% service charge for dine-in or 5% packaging for take out and pick-up transactions. Promo is available on July 13, 2020 only. Terms and conditions apply. #BotejyuPH

A post shared by Botejyu Philippines (@botejyuphilippines) on

 

The challenge of staying open

For Chef James Antolin, it has been like riding a rollercoaster to keep his Japanese restaurant Ikomai in Salcedo Village open these past four months. “In April, we catered to the frontliners along with Chit Juan. We made it happen. From there, we tried to open. Response was fantastic… [then we] had to shut down 2 weeks later as employees had a difficult time going to work. They were being harassed at the checkpoint [even] with proper documents… We tried again on May 2 to open, but failed again as no transpo. We sourced out and bought them bikes, [taking] 2 hours from Quezon City and 45 minutes from Paraรฑaque. I felt bad for my employees so we needed to stop. Finally on June 1, we started again and it was great turnout. Busy until June 15, then it started going downhill.”

While Ikomai continues to operate, Antolin reveals he has had to permanently close his other newer establishment, Chatto Bites. “With a heavy heart, I had to let go of my employees,” he shares. Kuppa’s Rommel Hinlo has also had to close his adjacent restaurant, Ilonggo Food Company, citing, “It was no longer viable to operate two restaurants.” 

While Sy’s group looks poised to ride out the crisis with all their branches now open (although they did have to close a few kiosks), Bugia remains worried about other restaurants that may not survive this next round of closures to come. “It’s the people who will still try to open but hindi talaga kaya. They will see that the expenses still outweigh the sales, which is happening already.”

 

The problem with rent

It makes a difference who your landlord is. Restaurateurs report that big malls are only collecting a small percentage of sales as rental, rather than the usual fixed rate plus a percentage of sales. Stella Sy sees this as an opportunity more than anything else. “The 5% they’re asking is really a no brainer… That’s the reason why mas kumikita pa kami sa 5% because we earn more.” The malls know that they won’t survive without the restaurants. “Kami ang maglalagay ng tao sa mall. It’s not the retail…Kami mga restaurants ang na-miss ng mga tao,” Sy declares.

While the big malls have been able to give some relief to their lessees, that’s unfortunately not always the case with independent lessors, many of whom are themselves SMEs without the deep pockets of an SM or Ayala. Bugia, for one, acknowledges that his landlord is nice but could only afford to give him one month free rental. “Where will we get money to pay him? How do we find a solution na hindi rin masakit for our landlords?” he asks.

Rommel Hinlo shares his own case, “The property we are at was acquired only three days before the lockdown. We hadn’t met our new landlords in person. We only had their contact information. It’s a good thing that they were pretty open and accommodating. We kept in touch with them constantly via emails and teleconferencing. We explained our situation in an honest manner and we were able to negotiate better terms with them.”

Longtime neighborhood cafรฉ Kuppa in BGC

 

Customer compliance

Restaurant owners have had to learn very quickly all the new protocols put in place to operate, following guidelines issued by the various local government units (LGU). Bugia shares, “I had a bit of hesitation in opening… I was very praning. I wanted to make sure 100% we are compliant with all the LGU regulations.” He was lucky with Mimi & Bros because the space is designed for al fresco dining. 

Mimi & Bros’ open, terrace-like interiors in BGC

With Pino which is more enclosed, Bugia had to figure out a solution. “Acrylic barriers are so expensive, and what do you do with them after? We did roll out plastic na makakapalparang sa jeepney, so sinabit namin sa ceiling in between tables.” According to Bugia, guests have been accommodating so far and said “they feel safe here.” 

While it takes effort to train staff to comply with the new protocols, what may be more challenging are the customers themselves. Bugia comments, “May matitigas ulo… People have to comply.” For example, when a large group insists on sitting together, he says, “Even if you’re all from the same family, we don’t know if you all came in one car, baka puede kayong hiwalay na kotse dumating.” He then adds, “What’s tiring is the mental aspect of this. Every time someone comes into the resto to even just ask for the menu, stressful hindi mo alam kung carrier ito, asymptomatic ba ito?” 
 

Contending with the “kitchenettes”

With the lockdown, home-based food businesses soon sprouted up to cater to the increased numbers opting for takeout or delivery. With just a few posts on Instagram or Facebook, they spread the word and soon orders were flying in. Bugia admits, “We’re competing against all these other home businesses. But you don’t want them to shut down either, because they’re all just trying to survive.” 

You may also like:

However, Stella Sy makes the case that established restaurants are more transparent about their practices, especially with regards to sanitation protocols, compared to these “kitchenettes” that usually operate from the home. Staff in all her restaurants change masks every day and sanitize everything down to the ballpens they touch. She even cites that one of her employees was caught without his mask in the kitchen, and they had to suspend him as a result. “You can see what we’re doing,” she contends. “Kaya bumalik na yung confidence sa amin.” 

The difference, then, between restaurants and home-food businesses lies in trust and confidence. Hinlo declares, “It is important for us as restaurant owners to make sure that our clients trust us with implementing the correct safety and sanitation protocols so that they can become more confident in dining with us.” 

 

An uncertain future ahead

The Department of Trade and Industry recently announced that restaurants will be allowed to increase their dine-in capacity from the current 30% to 50% as of July 21. It’s a positive step that restaurant owners have been anticipating. James Antolin says, “I will be comfortable when 50% comes.” 

Chef James Antolin’s Ikomai in Salcedo Village, Makati

But there are still other challenges ahead, like the ongoing curfews that stymie dinner service, with one restaurateur sharing that his customers tend to rush through dinner just to be able to make it home before the 9 pm cut-off. There is also the question of the ongoing liquor ban instituted by Makati City Hall as of July 14, yet another obstacle to increasing sales. 

Stella Sy acknowledges that rising COVID cases do impact their numbers. “Every time tataas ang mga [COVID] numbers, naku ayan na namannanenerbiyos na naman kamibaka mag ECQ na naman… Nasa momentum na kamitapos bigla last week, ayan na naman tumaas ng 2,000 yung cases.” 

That uncertainty makes it hard to project how long restaurants can really hold out until they can operate like before. Bugia says, “Everything is up in the air and that’s what’s causing the anxiety and the mental calisthenics right now in all the business owners.” 

One positive note from this crisis, though, is how it has brought restaurateurs together, most notably through Resto PH. Starting out as a Viber group, Resto PH has evolved into a properly organized alliance of more than 1,000 restaurant owners nationwide. Serving as a board member, Bugia shares, “Dati kalaban mo puro kapwa restaurants, nakakatawa na ngayon naging kami pa kakampi lahat.” The group shares suppliers, helps clarify protocols, interfaces with government agencies, and rallies to support each other’s businesses. They recently launched Farmers’ Produce, a series of mall-based markets that bring farmers’ produce directly to consumers, with one currently ongoing until July 17, then again from July 24 to 26, at The Podium Mall in Ortigas.

RestoPH members at Farmer's Produce at The Podium

But until the time a vaccine is found to protect the public, Antolin perhaps echoes the sentiments of most restaurateurs when he shares, “Until now I catch myself looking at the ceiling and asking for forgiveness. I pray that this will end soon and we all learn from this, as a person, as a family, as a community, and as a nation.”