Food deliveries and a different Ramadan: Dubai restaurants overcoming losses in the time of COVID-19

Dubai’s malls and food outlets have been breathing a bit easier as strict COVID-19 restrictions were gradually eased starting Ramadan.

On March 23, Dubai Municipality sent a circular to all restaurants and cafes stating they should halt services for two weeks but takeaways and deliveries were allowed. A month later, on April 24, authorities announced that restaurants could re-open but only if they followed certain conditions, including physical distancing and operating at only 30% seating capacity.

During the month-long lockdown, Dubai’s restaurants had to adapt very quickly to ensure they survived the crisis.

PIVOTING TO HOME DELIVERY

Previously dine-in-only F&B businesses and others that didn’t target the home segment started home deliveries for the first time. The establishments Salaam Gateway spoke to were clear that this is only a stop-gap measure to offset losses.

Appetite, the catering arm of gourmet deli 1762, previously made deliveries mostly for office orders. When the lockdown came into effect, all those orders vanished, Manar Al Jayouchi, managing partner at Appetite Catering Service & 1762 Deli, told Salaam Gateway.

“[W]e had to rebuild our business delivery to target the leisure market and not only businesses,” said Al Jayouchi.

The company lost 98% of its business but was able to recover a small portion in subsequent weeks.

“[…] I think we were able to create some channels during the lockdown that helped regain 8% of our old business. Having said that, the gap is still huge to operate at any commercial sense,” he said.

The restaurant joined new Dubai-based delivery app FoodKarma, which launched in March to combat food waste in the region and help businesses become more sustainability-minded. The app has already partnered with several restaurants, cafes, and other F&B outlets and vendors to give users the food which would otherwise be thrown, at discounts ranging from 15 to 60%.

“FoodKarma’s initiative was very much in line with our strategy. As for other aggregators, we still work with them and they are amazing incremental business but do not make sense being 100% of your business,” said Al Jayouchi, referring to Deliveroo, Zomato and ChatFood.

The pandemic highlighted some imbalances in the market between supply and demand, and control to access clients directly rather than through a third party, according to him.

“We found that we had become so disconnected from our clients and we needed to reconnect with them to offer a genuine value.”

Fine dining restaurants and hotels that also did not previously include home service as a key business have turned to deliveries.

The Tashas Group, a hospitality franchising company, introduced delivery services for all four of its fine-dining brands and joined delivery app Deliveroo.

“We’ve chosen to start delivering only this year. We are pleased to see the popularity and demand for our product and happy to be catering for families in their homes,” Stefano Mihalitsianos, operations manager for The Tashas Group, told Salaam Gateway.

The company opted to provide value-add offerings, as well. For Ramadan, Tashas Al Jalila, one of its restaurants, launched do-it-yourself baked desserts and puddings that come with a ceramic dish for customers to keep as well as Ramadan mocktails using homemade sodas and branded nougat sweets.

“Our industry as a whole has been directly impacted; our businesses have had to close, and we have chosen to remain closed post the minor lifts in light of strict capacity restrictions,” said Mihalitsianos.

“We quickly responded and explored delivery options to keep top-of-mind with our customers and we’re happy to be reaching them during lockdown. This however is not enough to offset the significant losses incurred and not a profit-generating exercise.”

Hotels, too, are capitalizing on home deliveries. Radisson Blu Hotel Dubai Deira Creek said it delivers iftar meal boxes from the hotel’s signature restaurants throughout Ramadan. The hotel also created special-value meals for people who want to donate iftar meals to the underprivileged, with each box costing 29 dirhams ($8).

Like Radisson Blu, five-star beach resort Atlantis, The Palm, joined food delivery app Zomato for two of its restaurants, Nobu and Ronda Locatelli, with 25% off the bill. For the first time in Nobu’s 10-year history, the iconic restaurant is now offering home delivery of Michelin-star chef Nobu Matsuhisa’s Japanese-Peruvian cuisine.

Even Vox Cinemas, which had to close as part of COVID-19 restrictions, has jumped on the bandwagon. The cinema chain launched Ramadan delivery deals through Zomato, Talabat and Deliveroo.

RAMPING UP DELIVERY

Establishments that previously offered home delivery had to ramp up this business segment, also to offset losses during lockdown.

Café Isan, a Thai eatery in Dubai’s JLT area, extended its delivery reach across Dubai and has been offering iftar meals to cook at home, sent in sealed packages via cooler boxes.

“We were a 60% dine-in business, so we've lost 60% of our business; however, we've gained an increased delivery ratio of 15-20% [from deliveries in Ramadan],” Lisa Knight, co-founder of Café Isan told Salaam Gateway.

The restaurant has been working with the Tourism Authority of Thailand Middle East and North Africa on free iftar sets and also started value combo meals.

Café Isan’s current focus is on digital menus and an enhanced online ordering platform as well as sharing cooking tips and tutorials online.

Responding also to consumers’ increasing health consciousness, Knight’s restaurant has been sending a free ginger, lime and mint tea kit with every delivery.

Healthy food company Kcal also added immunity-boosting items to its menu. The restaurant chain, which has five branches in Dubai and two in Abu Dhabi, closed its dine-in and takeaway business and started offering free deliveries on its website for Ramadan.

“We introduced contactless delivery and hygienically heat-sealed bags as well as many other safety measures within our kitchen, restaurant and delivery process,” Mark Carroll, founder & Co-CEO of Kcal Restaurant told Salaam Gateway.

In addition, the restaurant launched a limited-edition Ramadan menu to encourage healthier iftar meals. “We created a unique menu full of comforting Middle Eastern flavours inspired by TV Chef Hala Ayash.”

RISE OF E-COMMERCE MARKETPLACES

The growing demand for digital orders in the F&B sector has spurred e-marketplaces to expand their product lines to include food.

An example is UAE-based platform Noon.com, which launched a grocery delivery service alongside its existing range of products that include clothing and electronics. Called Noon Daily, the next-day delivery service covers Dubai and be accessed through the Noon app.  

Tradeling, a B2B digital marketplace that launched at Gulfood 2020 in the UAE includes an F&B vertical alongside other segments such as health & wellness. The MENA-focused platform already lists some 10,000 products from more than 10 countries.

The F&B product range includes bakery and confectionery, meat and poultry, seafood, dry grocery, frozen grocery, fresh food, deli, dairy and dairy alternatives, as well as healthy and organic food.

“We chose F&B because of the tremendous potential it holds in the region for growth and expansion. Our F&B offering includes an entire portfolio of products that support food suppliers, restaurants, hotels and retailers,” Muhammad Chbib, CEO of Tradeling told Salaam Gateway.

POST-COVID-19 NEXT NORMAL

So the question is: What’s the future of F&B post COVID-19?

Café Isan’s Lisa Knight expects the new norm to be safe but social. “Isolation and separation can really effect a person's emotional wellbeing, so the big question is: how can we socialise and eat out safely?”

She believes screens will become creative and widely used, disposable utensils will be around for a long while, and the COVID-19 revolution of home cooks will remain. “We're asking ourselves how can we support people doing that? It's special to us, as it's how we started in Dubai's Thai community.”

Carroll of Kcal expects to see F&B businesses focusing on improving delivery and online services to offset dine-in, with creativity and innovation being key to growth in months to come.

The Tasha Group’s Mihalitsianos believes the new norm will be about being extremely agile and responsive to change, utilizing technology far more than in the past, and becoming more resourceful and efficient.

Al Jayouchi at Appetite expects the F&B market will take time to find its balance. “There might be a bit of a shift to the digital world of e-commerce. That said, humanity is social at its core and the F&B was and will always be at the core of social connection so I do believe that F&B business will find a way to keep delivering humanity’s basic need of connecting with one other.”

(Reporting by Heba Hashem; Editing by Emmy Abdul Alim emmy.abdulalim@salaamgateway.com)

*Correction: The paragraph about Tradeling was amended to include the launch date of the B2B marketplace.

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