Malaysian restaurant owners ask for the government’s help to reduce the impact of the MCO


  • Food News
  • Thursday, 26 Mar 2020

According to a poll conducted by nearly 400 restaurant owners, at least 80% of restaurants have had to close or partially close during the MCO period. — AFP

All over the world, restaurants have been hit hard by the ongoing Covid-19 crisis. In Malaysia, local restaurants are feeling the heat, with many reporting doing 80% less business than they otherwise would – that is if they are able to remain open at all.

Today, a coalition of nearly 400 restaurant owners from the newly-formed Malaysian F&B Operators Alliance, made up of nearly 200 local restaurants, appealed to the government to provide rental relief and meet up to 50% of employee’s salary costs so that F&B businesses can maintain their staff and remain in business after the MCO ends.

The coalition was initially initiated by Renyi Chin, the co-founder of MyBurgerLab as a WhatsApp support group for restaurants to vent their frustrations during the MCO.

The group’s members now include restaurants like Vintry, Boat Noodle, espressolab, A&W, Table & Apron, De.wan 1958 by Chef Wan, Nando’s and many others, who collectively generate close to RM1.5bil per annum.

Liew says restaurant owners badly need some sort of help from the government otherwise the majority will not be able to reopen when the MCO ends. — Joshua LiewLiew says restaurant owners badly need some sort of help from the government otherwise the majority will not be able to reopen when the MCO ends. — Joshua Liew

Data tabulated by the group shows that since the inception of the MCO, restaurants polled have experienced an 83% business drop and will likely suffer RM105mil in revenue loss in the four-week MCO period.

A later poll also showed that of the nearly 200 restaurants in the coalition, only 20% are able to remain totally open during this period.

A further 30% of eateries have had to totally shut down operations while 50% remain partially open, meaning either reduced hours or only being able to open selected outlets.

“Some restaurants initially opened for two or three days then eventually decided to close down because during this period, supplies are hard to get because although restaurants are considered essential services, those who support essential services are non-essential. And with road blocks, things take longer to arrive. On top of that, a lot of staff are afraid to come to work because their families are worried about their safety, so staff numbers are dwindling, ” says Joshua Liew, the group’s spokesperson and co-founder of espressolab.

Liew is one of those severely affected by the MCO, as he has had to close all his espressolab outlets.

“At espressolab, we do coffee which is hard to deliver or take-away, so we are totally closed. So I’m going to be closed for a month with zero cash and I immediately need to pay salaries. It’s messy and chaotic and we have to pick up the pieces when we reopen, ” he says.

Tony Lim, the owner of Boat Noodle is also in the same boat (pun intended) as he has had to close 47 of his 50 outlets, and has seen sales drop by 95%.

In countries such as the United Kingdom and Singapore, governments have pledged to help pay a percentage of employee's salaries if they are kept on the payroll. — BloombergIn countries such as the United Kingdom and Singapore, governments have pledged to help pay a percentage of employee's salaries if they are kept on the payroll. — Bloomberg

“My outlets are mostly located in shopping malls and these are the restaurants that are very badly affected. In the shopping malls, only certain floors remain open, some floors are totally closed, so we have to close as well. So the biggest problem we have at the moment is there is no cash coming in at all, ” he laments.

Even restaurants that have been able to work with food delivery providers have suffered, as these providers typically take up to 35% commission for each transaction.

In line with this, the group’s memorandum to the government mirror their biggest concerns given the limited cash flow coming their way – paying salaries and rental.

The request to the government to meet up to 50% of the salaries of staff on F&B operator’s payroll was devised based on the model applied by the United Kingdom government, which has pledged to pay 80% of employee’s salaries if employers keep them on the payroll.

“We know the government’s coffers are pretty dry, so we are not asking for 80% of salaries like the UK, but this is the minimum required so we can pay our staff, which we want to keep doing, ” says Liew.

Chin says this is especially important for on-ground staff, many of whom earn less than RM2,500 and are totally reliant on their salaries to get by

“A lot of staff live pay cheque to pay cheque, if we are not able to pay them, there will not be food on the table for them, ” says Chin.

Even restaurants that have been able to do deliveries with food delivery portals are not doing very well, as they have to pay a high commission on each sale. — MyBurgerLabEven restaurants that have been able to do deliveries with food delivery portals are not doing very well, as they have to pay a high commission on each sale. — MyBurgerLab

In terms of rental, the coalition has proposed a rent moratorium for the duration of the MCO as well as a 50% rent reduction for a six-month period after the MCO ends and tax breaks for landlords.

“Landlords are in shock, they cannot promise whether they’re going to charge full rental or not, so what we are trying to say is if landlords can be incentivised to lower rental or do away with rental for some time, we can retain employment in that period, ” says Lim.

Ultimately, Liew says that getting help from the government will translate to the majority of medium and large-scale restaurants reopening after the MCO ends. On the other hand, if no help is given, Liew is pessimistic about the outcome for the restaurant industry.

“If the government helps us with the salary requests and rental moratorium, I think the majority of restaurants will be able to reopen. But do remember that Covid-19 doesn’t go away when the MCO ends, so there will potentially be a knock-on effect, and we definitely won’t be seeing pre-MCO sales. Optimistically, even with the government’s help, it will take about six months to recover.

“But if no help is given, I think most – if not all – restaurants will close. I mean, which company has the cash reserves to survive this?” he asks plaintively.

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