Restaurants will not be able to survive, says industry
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Cape Town - Sit-down restaurants will not survive on selling takeaways.
In response to newly-implemented Covid-19 regulation the chief executive of the Ocean Basket group and Head of The Restaurant Collective, Grace Harding said that the sit-down restaurants industry will not be able to survive the next few weeks reliant on only takeaways.
Harding said that sit-down restaurants remaining closed costs them a great deal.
“A sit-down restaurant makes less than 15% of its income from takeaways unlike a McDonalds which will lose far less of its income when its seating areas are closed. So if we estimate that a restaurant makes a turnover of R500k per month and 15% is takeaways at best, most restaurants will barely be scraping through as they still have rentals, wages and utilities to pay.”
Harding confirmed an imminent loss in incomes in weeks to come as a result of reduced shifts and some restaurant owners deciding to remain closed. In response to the closing of restaurants, she argued that not all restaurants are super-spreaders of the virus and that the government could help by segmenting the restaurant sector and not applying blanket rules to all.
“The word restaurant is too vague. There are some restaurants whose primary business is alcohol and bars, where people party, and may breach Covid regulations and are probably more conducive to spreading the virus. If we look at a restaurant serving meals primarily they usually close by 11pm and have customers seated in safe distance from each other. The area is very controlled.”
Co-owner of The Local Grill, Steven Maresch, said that the entire restaurant industry is going through a process of languishing, while trying to remain optimistic during a dire situation.
“We are the most affected by the Government’s decision because we employ a lot of people in our industry. At the beginning of the pandemic we had to lay off half of our staff and now there will be further lay-offs. This affects their livelihoods and means of paying their bills.”
Maresch added that a lot of restaurants are not designed to work on a takeaway system. Several will have to re-brand and repackage their services to make it take-away friendly.
“Takeaways account for less than 15% of revenue at a sit-down restaurant. So the amount of takeaways that would be needed to be sold for restaurants to remain afloat, is unrealistic.”
Maresch stated that due to Covid-19 regulations most restaurants have already reduced their seating capacity by 50% in order to ensure social distancing. Furthermore, less people are willing to eat out since the pandemic began resulting in less customers. Restaurants are further challenged with a loss of foreign customers and an alcohol ban which takes off roughly 40% of beverage profit.
“Essentially restaurants are trading at 10% of their true potential, while still having to pay for rental, utilities and the wage bill. Delivery services offer between 25% and 30% of the meal total; this results in restaurants taking a huge financial hit or having to mark up their prices.”
An anonymous waiter described the current situation at restaurants as depressing and unjust. He explained that the lockdown is most likely going to last much longer than two weeks, making it difficult for him to cover his bills.
“The restrictions were implemented in the week where we make most of our tips. We found our shifts cut, most of us sitting at home. Takeaways make up a fifth of our daily takings; most of the staff are not needed for takeaway deliveries. I will probably make 50% of what I should be making to get by, which is even worse without any tips.”
An anonymous member of kitchen staff at a restaurant at the Waterfront explained that kitchen staff and waiters get paid per hour. With most shifts cancelled, she explained that she will merely be receiving R800 for the remainder of this month.