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While some sectors of the economy are set to welcome the easing of business restrictions after more than a month of being under lockdown this Friday, restaurateurs such as Natasha Sideris, founder of Tashas, argues that it may be better to remain closed than operate under the prescribed conditions.
Covid-19 only magnifies the challenges South African restaurant owners face, such as already "unfair" rentals as well as delivery services charging a large percentage of the amount of each order, she said on Tuesday in a webcast hosted by the Institute of Chartered Accountants.
From the end of this week, the state will allow fast food sales and for restaurants to be opened only for delivery between the hours 09:00 to 20:00.
"We understand why the lockdown is there … we are just saying to government, landlords and aggregators (delivery services): help us during the lockdown," said Sideris, who founded the chain in 2005 with a single restaurant in Athol Square in Sandton. Three years later, the owner of Steers and Wimpy - Famous Brands - bought a 51% controlling stake in Sideris' chain.
Covid-19 "…is just the nail in the coffin for the restaurant industry," she said, pleading for government assistance.
In Australia, a limit has been placed on how much landlords can charge for rent, Ireland has postponed VAT and banking fees in the hospitality industry for 12 months and in Dubai landlords are currently not charging rent.
Sideris says sit down restaurants will remain loss making for a while even after lockdown ends. Dining out will only be allowed at level 1.
"We are not are not a takeaway business. Some businesses are built for takeaways with a small footprint, not a lot of staff and small kitchens. It is like telling a potato farmer why he does not suddenly grow tomatoes," she said.
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Staff in the hospitality industry have been most affected by the lockdown and resultant closure of restaurants. This has led to many restaurants implementing fund raising schemes for their staff during the lockdown.
Predium beer Stella Artois has, for example, launched a #SaveYourSpot initiative that aims to put financial relief into the hands of restaurants and bars affected by the lockdown and social distancing.
V & S Innovation, a local business incubator, has developed the Place Order platform, a new and affordable online ordering and delivery solution for businesses wanting to get their operations back up and running.
Sideris urges landlords to cap rentals at 6% of turnover with no base rental and aggregators to rather charge per kilometer than a percentage of the value of each order.
"…It will take 18 to 20 months to see a new normal. To open your doors and pay all these exorbitant rental rates for some takeaways is not feasible," she said.
Samantha Fuller, Uber spokesperson for sub-Saharan Africa, says, given the uncertainty and potentially lengthy nature of the pandemic situation, the company is investing in restaurant growth and promotions to encourage people to support local restaurants currently able to operate during the lockdown.
"As this situation progresses, we will continue to consider all options and work with our restaurant partners on sustainable ways to support them and the community.
According to Mr D Food, it too will be implementing initiatives to support the restaurant industry as businesses reopen.
"As a first step, we are introducing a commission relief scheme which reduces the commission rates for the vast majority of our restaurant partners. We have also allocated marketing funds to drive promotional initiatives to generate orders and revenue for neighborhood restaurants," said Devin Sinclair, CEO of Mr D Food.
"We believe that by working together with the industry we can help give restaurants a chance to begin to recover from the financial effects of the lockdown."
Nathalie Schooling, CEO of customer experience company, nlighten, feels landlords have not adopted a win-win approach during this pandemic.
"Life will not go back to normal and landlords are going to have to significantly reduce rentals post-lockdown. If they do not take their tenants into consideration now, they are going to find themselves without business in the coming months."
