The Malaysian Insight

RESTAURANT operators are transforming their business models as a way to cope with the Covid-19 pandemic, which has resulted in huge losses.

They fear that the ongoing economic sluggishness, coupled with the end of the loan moratorium, would continue to keep customers away.

To keep the customers and to encourage newer ones, these restaurants have adopted several measures to gain small quick profits.

Among them are selling pre-packed foods, door-to-door food deliveries and switching to economical menus. Some business owners even transformed their restaurants into hawker centres.

The changes are needed to make enough to cover rental and salaries, Pan Malaysia Koo Soo Restaurants and Chefs Association president Wong Teu Hoon told The Malaysian Insight.

“There are restaurants in Sarawak and Malacca that have converted to serve in masses to increase their business.

“And chefs in Johor are selling their food equivalent to hawker centre prices,” Wong said.

Restaurants are also offering set lunches from RM8 to RM12, providing soup and drink.

“It is similar to the concept of an economy rice stall, yet there our restaurants are air-conditioned.”

This business model remains unprofitable unless it attracts a large number of customers, he said.

“The cost of running a restaurant is very high, there are many staff and rental is high. Nonetheless, under the current situation, we can only progress like this.”

Wong said in the past, he strongly opposed pushing sales and promotions, but now he is forced to do so to attract customers.

Banking on CNY

Johor Kitchen Association president Ang Swee Kiong shared with The Malaysian Insight a restaurant’s experience in Kluang, Johor, which modified its model with the intention of attracting customers.

“This restaurant could hold 100 banquet tables but due to Covid-19 standard operating procedure (SOP), it can now hold 50 tables only. Sales have been low and it could not maintain the business, so it has to be altered.

“However, despite the modifications, business was still difficult and the business model had to be adjusted.

“This is just a way to keep the business going for the time being, to prevent the shop from folding,” he said.

Goh Ah Seng, president of Kuching’s Gusu Cooking Friends’ Association, said the situation is equally bad in Sarawak, with only 50% of walk-in orders restored and no wedding bookings.

“Many restaurants use cheap takeaway methods to attract customers,” he said.

Some restaurants are also offering pre-cooked food, targeting housewives, who can simply reheat the meals at home.

“Some restaurants do door-to-door deliveries, even if it is just five or six tables worth, they will take the orders.”

The industry is starting to feel the pressure with the end of loan moratorium, said Goh.

“I will try any method and pick up any little business, hoping to get through this difficult time.”

Wong predicts the restaurant industry may not see a turnaround until Chinese New Year next year.

“Many members are deliberating between the option of transforming their business and closing shop but we encourage them to try their best to survive. Hopefully, we can see the light next year.” – October 2, 2020.