Facing an existential crisis, the restaurant industry starts fighting back

By Opinion Time of article published Jul 29, 2020

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By Katlego Maphai

As the lights went off – literally – two weeks ago, the Small Business Recovery Monitor showed small business’ transactions taking a severe dip for the first time since early lockdown.

It demonstrated that though we named the index, the ‘Recovery Monitor’, it is a tracker of tidal progress with constant ebbs and flows.

It has been perhaps one of the most challenging aspects of doing business during the pandemic.

Around the corner from every hard-fought victory, there seems to be another punch to the gut, and each week fewer establishments stand up again to fight another day.

As the health and beauty community re-opened and breathed a sigh of relief, the food, drink, and hospitality business went into the ring. I have many friends who work in the industry. It has been difficult to see the immense challenges they face every day as they push to keep going and fight to retain as many of their employees as they can.

#JobsSaveLives – who will pay the cost?

The reinstatement of the alcohol ban and the 9pm night-time curfew has crippled the Food, Drink, and Hospitality industry – many of whom were already in a fight for their lives as the loss of tourism and foot traffic cut deeply into their ability to stay afloat. The collective turnover levels for the industry dropped back below the halfway point to recovery, losing 7 percent over the past two weeks. Food and Drink are now at 46 percent of pre-Covid levels.

Over the past ten days, hospitality protests took centre stage both on social media and in front of the Houses of Parliament in Cape Town.

Those who depend on this industry for their livelihoods vocalised their despair and desperation.

Restaurant Association of South Africa chief executive Wendy Alberts said nearly a third of restaurants had already shuttered since the onset of the lockdown.

It reflects accordingly in Yoco transactional data, which shows that 30 percent of businesses who were active in the same period in 2019 are yet to open their doors again since the onset of the pandemic.

With more closures looming and mass retrenchments on the cards, it is hard to summarise the impact this will have on South Africa’s economy. The industry employs an estimated 800 000 people.

It is hard to watch and even harder to look away. No matter how you slice it, the outlook is unpleasant.

On the one hand, the Covid-19 pandemic has and will cost us thousands of South African lives. On the other hand, the impact of the lockdown has and will continue to plunge South Africans into poverty. What we are up against is deciding who will pay the price and right now, the restaurant industry is firmly in sight.

What we owe each other

In a pre-Covid world, the nature of entrepreneurship meant that the success or failure of a business lay across a variety of factors: product, target market, branding, timing. Sometimes a success story is born out of trial and error, and sometimes successes come in the serendipitous alignment of things going right.

Right now, entrepreneurs have done as much as they can and with little else to hope for, placed their businesses in the hands of their customers. We cannot innovate, motivate, or pivot our way out of a crisis without the unwavering support of a community.

The Covid-19 pandemic has shown up the cracks in the foundation of our system – and what awaits us on the other side of this global issue are broad questions about how fragile our system is and how we bolster it for anything that lies ahead.

For now, these questions are too complex for any one person to contemplate, let alone find the answers. We can share our opinions, stand our ground, and do our best to make the right decisions. This pandemic has asked a lot of us, especially small business owners.

The one question we can all contemplate as we face the double-edged sword of lockdown is, what do we owe each other? Our peers, colleagues, family and friends in the restaurant industry need us to show up, and support the small. For every R10 spent with a local independent restaurant, R6.50 gets invested back into the economy. We need to make overt, purposeful decisions when it comes to our spending power. And if nothing else, offer kindness online. Be kind, even if you don’t find yourself on the same side of the red tape.

And in so doing, we can save as many lives and as many jobs as possible.

Katlego Maphai is the co-founder and the chief executive of Yoco, a financial platform for small businesses.

The Yoco Small Business Recovery Monitor in partnership with IOL is a live small business transaction data resource.

The index is updated daily with the latest information from over 90 000 Yoco merchants,relating to their turnover by province and industry.

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