Covid-19 lockdown: WFH leaves corporate caterers high and dry

By: |
June 13, 2020 2:15 AM

There has been some pick-up in the industrial catering business after manufacturing companies resumed operations. But this may not be enough to sustain corporate catering companies, and many are on the verge of folding up.

Though the country is opening up in a staggered manner after the lockdown, there are no signs of revival of business, added Bindra.

The corporate catering segment has seen a 90% drop in their business with cafeterias on IT campuses shut and showing no signs of reopening anytime soon. There has been some pick-up in the industrial catering business after manufacturing companies resumed operations. But this may not be enough to sustain corporate catering companies, and many are on the verge of folding up.

Corporate catering vendors in Pune were caught in a fight with food aggregators, who had entered the segment and severely dented the formers’ business at a time when the vendors were already hit by the pandemic-induced lockdown, said Gurvinder Singh Bindra, president of National Association of Corporate Caterers (NACC) and chairman of Bindra Hospitality Services. Though the country is opening up in a staggered manner after the lockdown, there are no signs of revival of business, added Bindra.

The Corporate Catering Association has 150 members and it will start signing deals with companies across the country soon. The members will work together to upgrade their delivery systems, technology to improve operational efficiency and overcome the challenges.

Catering vendors, who were dealing directly with corporates, had to route their business through these aggregators as companies had outsourced this service to them. Further, the aggregators started charging vendors to be on their platforms, who also have to pay manpower charges. All these reduced the vendors’ margins significantly, pointed out Bindra. Some of the vendors have gone to court against the aggregators.

These corporate caterers used to serve up around 3 lakh meals per day, catering to employees of IT/ITES companies, but 90% of the business has been wiped out, said Bindra.

This segment is bigger than restaurants when it comes to employment and, in Pune alone, it could be employing 30,000 to 35,000 people, he added.

Again, there is also the industrial catering segment, where over 2 lakh meals are served every day in Pune. While industries have started operations, most of the companies are operating with 10% to 20% staff strength.

Also, under the present circumstances, the fear factor to consume food from the caterers is very high, and more people are opting for home-cooked meals.

Overall, only around 20% of catering business is functioning, so some caterers will sustain while others will succumb and shut down. On top of that, no relief, of any sort, is coming their way or is even being considered, said Bindra.

Naveen Rai, director, Fusion Spice and Pune head of the catering association, said IT companies like TCS had asked some of their corporate caterers to start removing their kitchen equipment from their campus in Pune as these would not be needed anytime soon. TCS has announced it plans to permanently move a majority of its employees to work-from -home mode. “Moving out equipment is a sign that things may not return to normal and has made our future uncertain,” added Rai.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1HDFC Life Q2 profit rises 5.6% to Rs 326 crore
2State RTCs reported losses of Rs 13,957 crore in 2016-17
3Vineet Nayyar resigns as IL&FS executive vice chairman