From Midnight on the 24th, Coffee Shops Prohibit In-Store Use
Restaurants Also Ban In-Store Use After 9 PM
Industry Says "Desperate Ahead of Year-End Peak... Expanding Delivery Services"
On the 20th, when social distancing level 1.5 is in effect to prevent the spread of the novel coronavirus infection, the streets of Myeongdong in Seoul are seen to be quiet. Photo by Kim Hyun-min kimhyun81@
[Asia Economy Reporter Choi Sunghye] Due to the spread of the novel coronavirus infection (COVID-19), social distancing level 2 has been applied to the metropolitan area from midnight on the 24th, plunging the dining industry into deep distress once again. Although there were expectations for a year-end boom as social distancing levels were eased, restrictions on business hours and store operations have immediately caused inevitable sales damage.
According to the Central Disaster and Safety Countermeasures Headquarters on the 23rd, starting at 0:00 on the 24th, the social distancing level in the metropolitan area has been raised to level 2. Restaurants are only allowed takeout and delivery after 9 p.m., and cafes are only permitted takeout and delivery during business hours. This applies not only to franchise-type beverage specialty stores but also to all cafes primarily selling beverages. As with level 1.5, restaurants and cafes larger than 50㎡ (15.125 pyeong) must comply with one of the following: ▲maintaining a 1-meter distance between tables ▲leaving one seat or table empty ▲installing partitions or screens between tables.
In particular, the upgrade to level 2 is expected to significantly impact the sales of coffee specialty stores. The dining industry estimates the sales ratio of in-store to takeout at coffee shops to be about 6 to 4 or 5 to 5. If in-store operations are immediately banned, sales could decrease by 40 to 50%.
Small business owners operating independent coffee shops are deeply concerned. Mr. Han, who runs a coffee shop in Gangnam-gu, Seoul, lamented, "Our cafe does not offer delivery, and after the implementation of level 2.5 two months ago, sales have not recovered. Now with the upgrade to level 2 again, it feels like death." Mr. Kim, who also runs a coffee shop nearby, sighed, "We had to close due to COVID-19 and just reopened a month and a half ago, but the future looks bleak."
The franchise industry is responding by strengthening delivery services. This month, even Starbucks, the number one coffee franchise that had insisted on in-store and drive-thru only, announced its entry into delivery services. According to Ediya Coffee, an analysis of sales data from October last year to September this year showed that delivery order sales increased by a staggering 660% compared to the same period last year. During the same period, the number of orders reached 1.1 million, a 612% increase year-on-year. The number of Ediya stores offering delivery has increased from 400 in 2018 to 1,800 nationwide.
On the 19th, when social distancing level 1.5 was implemented to prevent the spread of the novel coronavirus infection, a closure notice was posted at a pub in Itaewon, Yongsan-gu, Seoul. Photo by Jinhyung Kang aymsdream@
Self-employed restaurant operators are also deeply distressed. They hoped to make up for sales losses with a year-end boom as the spread of COVID-19 showed signs of easing, but the resurgence of COVID-19 has made sales damage inevitable.
Mr. Lee, who runs an Italian restaurant in Songpa-gu, Seoul, confessed, "Christmas and the year-end were our only hopes, but now I really don't know how to hold on." Many self-employed people also complain about the burden of rent and other expenses.
Dining companies operating buffet restaurants are also voicing concerns. Buffets are also only allowed takeout and delivery after 9 p.m. starting the 24th. After the second wave of COVID-19, buffet restaurants suffered damage, including a two-month closure due to the implementation of social distancing level 2.5. About 40 metropolitan area stores of CJ Foodville’s VIPS and Seasons Table have closed. Shinsegae Food also suspended operations at five buffet-type stores, including Bonobono and Olban. E-Land Eats’ Jayeon Byeolgok, Ashley, Susa, Pizza Mall, and Rown stores in the metropolitan area have also stopped operating.
A representative of a dining company operating buffet stores said, "We are operating with thorough quarantine and hygiene measures, so it is unfortunate that business restrictions have started again."
Dining companies are also expanding delivery services to survive. CJ Foodville has expanded the delivery-only brand "VIPS Yum Delivery" from the existing areas of Seocho and parts of Gangnam in Seoul to nine districts in Seoul including Gangnam, Gangdong, Gangseo, Dongjak, Mapo, Seodaemun, Seocho, Seongbuk, and Songpa, as well as parts of the metropolitan area such as Gyeyang in Incheon and Ilsan Dong-gu. E-Land Eats, after starting delivery services for Ashley in September, has also begun testing delivery services for Jayeon Byeolgok.
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