Lockdown regulations are crippling the restaurant industry
Durban - THE ban on alcohol sales and the 9pm curfew during the lockdown have resulted in many eateries struggling to break even.
Linkey Moodley, the owner of the Britannia Hotel, which is popular for its mutton bunny chows and chops chutney, has likened the establishment to a morgue.
“We’re only getting a sprinkling of people,” said Moodley.
“Words can’t describe what the pandemic has done to the business. I’ve owned Britannia for 40 years and I’ve experienced nothing like this before. We have always been on an upward rise but now it seems like we’re spiralling into the abyss.”
Even with the call-and-collect option, the business is only making 10% of its daily turnover.
“After the hard lockdown, the reopening of restaurants for sit-down meals was welcome news, but the ban on alcohol, the curfew and the general fear of contracting the virus put a damper on sales. Not many people want to come through for supper because of the curfew.
“People also want to relax with a glass of wine or a beer. This goes hand-in-hand with meals and now a big part of the formula has been taken out.”
Last week, he said he retrenched 25 of 69 staff.
“It was heartbreaking and hopefully there will not be further retrenchments. But if push comes to shove, we have to let go of 15 more.”
He said 22 staff did not get their UIF Covid-19 Ters (Temporary Employee Relief Scheme) payment for April and they were still waiting for the May payout.
“We were unable to submit a request for June, as we are still waiting for the outstanding payments. I’m also insured for business interruption, with a disease clause, but nothing has been issued yet.
“Our hotel and Capsicum restaurant have enjoyed a successful history but this is indeed a dark period for us.”
To adapt to the new normal, they recently launched an online service (food.hotelbrits.co.za) that offers free delivery within a 15km radius.
The impact of the lockdown has also resulted in Silverani’s closing its restaurant in Durban North.
Silverani’s is a 24-year-old family-owned eatery that first opened on Prince Alfred (now Florence Nzama) Street in the Durban CBD.
Thanesh Mooodley, a third-generation owner, said their lease had expired in April and, because of the uncertainty during the lockdown, they could not get commit to signing a three-year lease agreement. He said they were not allowed a month-to-month rental option and they had decided to close the restaurant in Durban North and operate from their home in Musgrave.
For now, Silverani’s will only offer a delivery option until it is financially feasible to reopen. Moodley said they were, fortunately, able to retain their staff.
He said serving alcohol made up 70% of their sales.
“The type of customers we had were responsible. Many were business owners, who would have lunch or dinner with clients. The government should reconsider and allow us to serve alcohol at least until 7pm, when people are able to return home at a decent time and, in turn, we will be able to keep our business running.”
Last Wednesday, Durban restaurants that are part of the Restaurants Collective and the Restaurant Association of South Africa took to the streets in the national Million Seats on the Streets campaign. They called for the unbanning of alcohol consumption with meals and the removal of the lockdown level 3 curfew, which they said was destroying their businesses.
Mahomed Essop Ally, the owner of Vapor Café in Morningside, a restaurant famous for its saucy Godfather prawns, was among the protesters.
He said the curfew was hurting the business the most and it was only due to the grace of God that he was still able to operate. Ally said he took out a R500000 bank loan to ensure the eatery was health compliant.
He has since implemented a paperless menu, which is used by scanning a barcode from your table with your phone. Those who are not tech savvy will be given disposable menus. Ally has also built six two-seater Covid-safe booths outside his restaurant, where customers are able to enjoy meals in complete isolation.
To further comply with regulations, the restaurant is operating with 50% of its staff and, due to social distancing rules, are unable to cater to its maximum capacity.
Ally said they still had to pay for operational costs and the rental.
“We are playing ball with the government but they are not playing ball with us. We’re all in trouble. This pandemic has crippled us.”
Ally said he started off as a dishwasher in the industry and worked his way up to opening his first restaurant.
Grace Harding, chief executive of Ocean Basket and spokesperson for the Restaurant Collective, wrote to the Presidency on behalf of the group this week.
She said that in 2019, the food and beverage industry contributed R6billion monthly to the South African economy and employed more than 500000 people, many of whom were SMMEs.
A year later and these same businesses were unlikely to make a profit.
“At least 70% have had to retrench employees to save costs and 40% have not received any form of government loan or support.”
Harding said that since opening on June 29, most restaurants were trading below 50% of their usual turnover.
“This loss of cash flow has depleted businesses and individuals of any reserves, and timing is now critical. Without immediate action, these losses are likely to be permanent.”
She said there were many contributing factors. This included no alcohol sales, a curfew of 9pm, customers being uncomfortable going out, customers losing their jobs and the implementation of lockdown regulations - such as reduced capacity due to social-distancing requirements.
Harding asked, among other things, that the Presidency speed up delays in the UIF Covid-19 Ters payouts, allow restricted alcohol sales for licensed sit-down restaurants, amend the curfew to 10pm, reduce VAT by 5% until June 2021, and reduce the rates and utility costs charged by landlords by 50% for one year.
“Of the estimated 15000 sit-down restaurants in South Africa, only 1500 are part of a franchise group, the majority are entrepreneurs navigating this devastating crisis alone.
“Based on ruinous revenue losses related to government-ordered closures, economic realities and projections, the sit-down restaurant industry’s survival is dependent on a targeted collaborative response.
“An unprecedented crisis of this scale requires that we work together.”