Fresh cuts to run deep for sushi chain staff

Finance | Mandy Zheng 29 Jul 2020

A sushi chain with 28 outlets in Hong Kong has told its workers to take 15 days of unpaid leave plus five days off next month - and their pay is being halved.

Itacho Sushi management said in an internal notice it had no choice other than to take this course, though arrangements might be adjusted if revenues rebound.

The ban on dining inside eateries during evenings, which became effective on July 15, is said to have caused a 70 percent plunge in revenues.

And Itacho Sushi expects a further business decline of 10-20 percent with the total ban on dining-in from today.

The chain offered a 30 percent discount on set meals last week, but some outlets saw customers at one table only even during lunch hours.

And a person carrying the coronavirus visited its outlet at Trend Plaza in Tuen Mun in mid-July, according to the Centre for Health Protection.

Simon Wong Kit-lung, chairman of the LH Group of restaurants, is also looking to tougher times, saying yesterday that the catering sector might see a 90 percent drop in revenues while the total dining-in ban is in force.

Middle-sized restaurants might find it harder to survive compared to fast-food chains and small eateries, he said, as they are not used to offering takeouts and also face higher rents.

"If a restaurant only does takeouts then it won't be a surprise if it can't even afford to pay electricity bills," Wong said. "At this point, [businesses] are frozen and paralyzed." He some operators are thinking of borrowing money or moving to cheaper premises.

The president of the Hong Kong Federation of Restaurants and Related Trades, Simon Wong Ka-wo, said about 1,200 eateries have closed temporarily since the ban on night-time dining-in.

He expects another 500 restaurants to do the same with the latest measures and for the sector to lose HK$5 billion in revenues this month.

Wong said it is hard for restaurants hosting weddings and parties to switch to takeouts, while small eateries might not be able to afford the fees of food delivery platforms.

Allan Zeman, chairman of the Lan Kwai Fong Group, said 5,000 to 6,000 eateries could close if the dining-in ban lasts for over a month and urged the administration to provide subsidies totaling HK$8 billion.

Ten percent of bars and restaurants in Lan Kwai Fong have already closed during the pandemic, he said.

The Hong Kong Retail Management Association is in the meantime urging landlords to stop charging base rents for the coming nine to 12 months and instead charge in line with incomes.

A failure to do so could put 60,000 shops at risk of closure, affecting 260,000 employees, the association said in a letter published in newspapers and online. "We have reached a life-or-death moment," it added.

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