Restaurant industry on its knees
No assistance for food outlets, which are prevented from operating during the lockdown, though they support SA’s unskilled labour
"We are the life of the streets. We are the music in the neighbourhood. We can’t even feed our people."
Head of the Restaurant Association of SA (RASA) Wendy Alberts says hundreds of thousands of restaurant workers are starving as they haven’t earned any money during the lockdown in which restaurants are not allowed to be open.
She is inundated with messages from restaurant owners who unable to provide for hungry staff. The Covid-19 lockdown is crippling restaurants, yet they have received "absolutely no financial support from the government, the Unemployment Insurance Fund (UIF), banks or landlords", Alberts says.
And there is a lack of communication from the government about when they can reopen and how.
Rasa estimated that restaurants employ 800,000 people, and is a large employer of unskilled workers. The industry has acted as a "springboard" for people to launch into other careers.
Rasa surveyed thousands of restaurants about their financial positions. Alberts says the answers overwhelmingly showed that restaurants were left on their own and facing imminent closure.
Only 3% of those that responded said they had accessed financial help from banks in the form of loans. But none has received money from the UIF or rental discounts from landlords. Most did not have working capital to reopen in the future and many had such high debt they would probably have to go into liquidation.
It is believed that when the lockdown ends, people will prefer to have food delivered rather than go to restaurants.
Every restaurant owner who the FM spoke to called (without prompting) for food delivery firms to reduce their 20%-30% commission, which is levied in addition to a customer delivery fee. These high fees mean restaurants make no money, they say.
"This is not the time for profiteering", Col’Cacchio business development manager Greg Mommsen says.
And Alberts’ research into the industry suggests many restaurants will never reopen. "Imagine suburbs like Parkhurst [in Joburg] without restaurants." And what about tourist hot spots such as Camps Bay and Umhlanga?
Her phone beeps all day with messages, mostly about staff facing hunger.
One restaurant owner’s message read: "I employ 49 people. I want to give them something. I will never be able to look these people in the eyes again. This is a hopeless situation. I would rather die."
Another owner told her the only way to "get out of debt is to commit suicide".
Another said: "I have no income. I have to pay my staff. I am so desperate. What do you think I can do?"
Alberts has no answers despite the tourism minister engaging with her association directly and often. She says the minister has had little feedback from the rest of the government about how the hospitality industry can deal with the crisis.
The impact on restaurant workers is even more dire. Waiters rely on tips for a large portion of their income. They have gone without since mid-March when President Cyril Ramaphosa appealed to South Africans to practise social distancing.
Workers have also appealed to Alberts for direct assistance. She received this message from a waiter: "I am dying of hunger. I don’t even have money for salt. If you know of any food organisation, please add me. My kids are crying day and night."
However, the industry does not expect to get back to operating at full capacity for the next 18 months as consumers — already under pressure from the economic knock of the lockdown — practise social distancing, says Manny Nichas, CEO of Mozambik, a franchise chain of 17 Portuguese restaurants.
Nichas is worried about his staff. "In our stores we employ an average of 50 people. But the number of people they feed is much higher."
As far as he is concerned, the government has to choose: does it continue the lockdown and let people starve? Or will it allow businesses to operate, though differently?
Celebrity chef and restaurant owner Shaun Smith predicts that family-owned restaurants, unlike large chains, won’t have the capital to withstand the lockdown and will close.
"Small family restaurants employ more staff than they probably need to. Their workers aren’t just workers. They are part of an extended family. Often owners give their workers loans and favours."
Jolly Roger, a well-known pub in Parkhurst, has created a crowdfunding page to help support its staff. Donors are entitled to free pizza or chilli sauce when the pub is allowed to reopen.
This week, Tigers Milk, an upmarket chain of 16 restaurants in Cape Town, Joburg and Pretoria, sent out SMSes requesting donations for staff.
So what will the future look like? Smith fears that the high charges levied by delivery companies will make it unsustainable for restaurants to operate, if they open on the basis of deliveries alone.
Instead, he suggests customers order and then collect food from their local restaurant’s parking lot.
Or — can delivery firms be persuaded to drop their fees? The response from Uber Eats spokesperson Samantha Fuller is vague.
"Given the uncertainty and potentially lengthy nature of the current situation, we do not believe deferred commissions are the solution. Instead, we are investing in restaurant growth and promotions to encourage people to support the local restaurants currently able to operate during the lockdown."
It’s unclear which restaurants she is referring to, because all are prevented from operating during the lockdown.
Nichas is not waiting around for favours. He has signed a deal with a different delivery company to deliver his franchises’ food, at a more reasonable cost, when the lockdown ends.
However, Alberts sees a future with far fewer restaurants, which she calls a cornerstone of social life. "It’s [the venue of] your first date, your birthday party and your anniversary. It’s also a meeting place for the signing of a deal. Restaurants are such a major component of life."