By, Sofea Azahar, Research Analyst at EMIR Research.
As we go through another phase of Movement Control Order (MCO) in several states with high number of Covid-19 cases, the same cycle of pessimistic economic impact is expected especially for businesses that are reliant on day-to-day operations such as those in F&B sector. Perhaps, one way to try to help ease their burden is by extending the daily operation hours.
Based on the standard operating procedures (SOPs) reported by Malaysiakini, most businesses are only allowed to operate between 6am and 8pm and some of them are as follows:
- Restaurants, food trucks, food stalls;
- Sundry shops and convenience stores;
- Veterinary clinics and shops of pet food supplies; and
- Laundry shops including the self-services laundries, conditional upon having staff monitoring the SOPs.
For eateries, dining in is not allowed except for takeaways or deliveries. Anecdotally, this will definitely affect the businesses of which revenues very much rely on dine-in such as those in shopping malls and the small stall or restaurant owners outside of malls.
Additionally, small businesses that are partners with food delivery companies such as Grab and Foodpanda would find it relatively more challenging to cope with high charges imposed by the delivery vendors.
Some ground experiences faced by the food hawkers in Klang Valley have been reported by the media since the imposition of MCO on 13 January.
Reported by The Star, Bukit Bintang Hawkers Association chairman See Foo Hoong said some hawkers find it hard to make deliveries to their customers during the MCO because they could not afford the charges imposed by delivery vendors.
He said, “The charges are a bit too steep for small businesses and some of us cannot handle deliveries because we run our businesses alone.”
In return, the sellers would likely have no choice but to pass on the higher costs to the consumers which some are not keen to do.
As reported by NST, an eatery business owner Zamari Jaib who owns Mee Bandung Muar also said coping with limited operating hours is difficult in terms of retaining his staff with limited savings and he is not too keen to go online as it will lead to increased prices.
The president of Malaysian Muslim Restaurant Owners Association Datuk Jawahar Ali Taib Khan has also appealed for the operating hours of restaurants to be extended and that restaurants have experienced losses by 80 per cent on the first day of MCO.
The nationwide ban on inter-state travel would also affect the food sellers who are located at the Rest and Services (RSAs and R&Rs). However, one major help would be to lift the travel ban so that people can start travelling again. But nothing is for certain yet given the number of cases remain at four-digit as of now.
Given these unfortunate circumstances and the need to impose a blanket MCO in certain states to combat the fast spread of virus, there should be a balancing act to try to compensate the losses faced by the people.
Hence, there is a crucial need for the government to consider an extension for business operation hours from the current 8pm to 10pm. Since food purchases are only permissible through takeaways and deliveries, this extension should not be a concern that people will not adhere to the SOPs.
On a side note, it is very possible that customers would still want to order for deliveries or takeaways after 8pm.
Fortunately, due to the reinstatement of MCO and to support the small businesses during this critical time, Grab Malaysia has further reduced the commission ceiling up to 5 per cent and slashed delivery fees to as low as 50 cents, effective from 13 January until 10 February.
The company will also absorb the costs for self-pickup orders made via Grab app and reduce commission to 0 per cent if customers choose to pick up their orders themselves.
In addition, the government should also consider extending the existing initiatives introduced in the previous stimulus packages and Budget 2021 for another few months namely the Wage Subsidy Programme for the hard-hit sectors and the Targeted Loan Repayment Assistance (TRA) for the B40 borrowers and micro enterprises because they would need all the help and assistance they can get now.