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News Article

CDMX Bars and Clubs Become Restaurants to Face Crisis

By Alessa Flores | Wed, 08/12/2020 - 12:27

The COVID-19 pandemic has made it impossible for crowds to congregate in one place, making bars and clubs an unviable business. Faced with this situation, Governor Claudia Sheinbaum announced that bars, canteens, nightclubs and similar establishments could be transformed into restaurants to alleviate their economic burden and accelerate their reopening.

Currently, food and beverage preparation services, which include restaurants, bars, nightclubs and other similar establishments, represent 568,866 economic units in Mexico, of which 97 percent (544,937 establishments) are restaurants, while the remaining 3 percent (23,929 establishments) are nightclubs, bars and cantinas, according to the National Chamber of the Restaurant Industry (CANIRAC).

Some restaurateurs do not agree with the measure because food and beverage service protocols are different for nightclubs and restaurants. "A restaurant is not like turning on a stove and cooking some eggs to say you are selling breakfasts," Jorge Arriaga, Director of restaurants, bars and clubs such as Tequileria Bar or La Perla de Occidente, told Milenio. He also explained that clubs do not have the infrastructure to become restaurants nor the necessary logistics. Arriaga explained he tried to change his bar-restaurant to just a restaurant and it did not work. 

Carlos Martínez, Manager of the Goa Lounge Bar, considers it is not convenient for bars to migrate to be restaurants. "Switching to a restaurant would cost me a lot to invest in preparing the kitchen and arranging some tables. It is not good for me," Martínez said in an interview with Milenio. In addition, it is estimated that the conversion of bars and clubs to restaurants could cost more than MX$100,000 (US$4,500) to owners of these establishments in Mexico City, without counting training for employees, according to a note from Milenio.

Even if clubs, bars and nightclubs are transformed into restaurants, they may still not be out of the woods. In mid-July, Germán González, Vice President of CANIRAC, commented in an interview with Forbes Mexico on the urgency of reviving the food and beverage preparation industry. "It is urgent to reactivate, the industry cannot take it anymore. After this 100-day closure, between 20 and 25 percent of the establishments will disappear," said Gonzalez.

Previously, as long as social-distancing protocols, use of gel and facemasks were maintained, authorities had allowed restaurants to occupy part of sidewalk to extend their capacity and operate up to 40 percent. However, according to González, this is not enough to cover the restaurants' expenses and costs. "I am confident that in the next two weeks the Mexico City traffic light will change to yellow, which would increase the possibility of receiving customers," González told Forbes Mexico.

In an exclusive interview with MBN, Duncan Montero, General Manager LAC North Region of Burger King at Restaurant Brands International, explained that the multinational chain is making great efforts to maintain its current pre-pandemic sales. “We (Burger King) are also working hard to regain the strong sales momentum that we had pre-COVID-19 as restaurants continue to reopen and authorities start easing dining restrictions,” says Montero. 

Burger King has been able to adapt to the pandemic through home delivery services. “We have been able to capitalize on this trend even before the COVID-19 crisis started and we have managed to grow our delivery userbase and the frequency in which they use this channel. We expect delivery to gain even more relevance going forward but at the same time we acknowledge that our guests love the experience they enjoy when visiting our restaurants via the traditional channels, too,” says Montero.

Photo by:   senivpetro
Alessa Flores Alessa Flores Senior Journalist and Industry Analyst