Dining industry still in ICU

Level 3 restrictions provide only partial relief for ‘decimated’ dining industry.
Businesses and jobs have been gravely affected by Covid-19 lockdown restrictions. Image: Pascal Rossignol, Reuters

While restaurants have been allowed to provide delivery services and more recently takeaway food and alcohol under lockdown alert Level 3, the new normal has not been enough to cover a number of restaurants in the industry. 

“It’s definitely a tiny breath but it has not taken us off a ventilator – we are still in ICU,” says Grace Harding of the Restaurant Collective, an association representing sit-down restaurants in the industry. 

Restaurant doors closed for over a month when the country went under a hard lockdown from March 27. Some reprieve was provided in May when the government’s Level 4 restrictions allowed for the sale and delivery of hot food.

From the beginning of June this was extended to pick-up takeaways as well as the delivery of alcohol between 09:00 and 16:00 from Mondays to Thursdays. 

Relief welcomed, but it’s not enough

The lifeline has not provided equal relief across the board. 

“It’s good but it’s not going to feed everyone,” says Harding, who is also the chief executive of Ocean Basket. 

She explains that since restaurants are now only permitted to sell takeaways, a restaurant normally requiring an average of 25 employees will now only require six. In some cases, this drops to almost no staff at all. 

Ryan Pellatt, operations executive at News Cafe, tells Moneyweb that the entertainment restaurant chain’s 20 stores have largely remained closed, even as the restrictions on the industry are being gradually lifted through the different levels. 

Read: Lockdown causes ‘total devastation’ to tourism & hospitality

“We have two stores that are attempting to trade but it has not been successful and I think the reason for that is we are not known as a takeaway venue,” says Pellatt.

Experience can’t be ‘boxed’

“Our product is designed to be enjoyed inside a store and is very much ‘experience’ focused, it’s very difficult to put it inside a box and send it out.” 

News Cafe also has seven stores in other African countries such as Kenya and Tanzania where operations have also stopped due to Covid-19-induced restrictions, while in Namibia and Botswana the restaurants have started takeaway operations. 

“The outlook for the year was obviously tough trading conditions, but certainly at no stage did we consider that we would not be trading at all,” says Pellatt. 

Wendy Alberts, CEO of the Restaurant Association of South Africa (Rasa), says the industry across the globe has been “completely decimated” by Covid-19.

“There’s been no relief for us. We have had to completely transform our business models from the onset with delivery, and then with takeaways. It’s not the standard business model [of what] we do.

It’s about more than just food

“Our business is about bums on seats, foot traffic, the experience and the combination of liquor and food,” says Alberts. 

She expresses frustration around not getting clear explanations from the government on the process it used to allow certain industries and activities to resume – such as church gatherings, schools opening and flights – while nothing has been says about the restaurant industry. 

Read: Burger King owner says coronavirus may change restaurants forever

Alberts says calls from restaurant owners who have decided to permanently close their doors have been “coming in fast and furiously”. 

“We are losing a very important part of the GDP and a very important part of employment,” says Alberts. 

According to Rasa there are about 23 000 restaurants in South Africa employing around 800 000 people. 

“Remember with the current business model 50% to 60% of our staff are front-of-house staff [bar tenders, waiters, sommeliers] and all those people are unemployed,” says Alberts. There is a ripple effect on suppliers, including businesses involved in production, logistics and entertainment.

The longer the restrictions remain, says Harding, the more staff will have to be retrenched when restaurants do open because the businesses will be under pressure to manage costs. 

Debt pile

Pellatt says even if restaurants are only allowed to be fully operational in the latter part of the year News Cafe is intent on ensuring that it reopens as many stores as possible, although it’s difficult to put a number on exactly how many are likely to stay open.

He says the group is assisting its franchisees with various cost-cutting measures such as renegotiating leases with landlords. But with landlords facing their own uncertainties Pellatt says the kind of relief they have received has been more temporary, month-to-month solutions.

In addition to rent, restaurant owners have also had to contend with costs such as full-year subscription fees for performing rights and music rights for music played inside the establishments, as well as municipal rates, says Alberts.

Read: Jamie Oliver’s restaurant collapse to cost more than 1 000 jobs

Insurers disappoint

An added issue not only for the restaurant industry but all businesses that have had to close during the lockdown is insurance companies that do not recognise infectious or contagious diseases in their business interruption cover. 

Following engagements with the industry, the Financial Sector Conduct Authority (FSCA) and Prudential Authority (PA) said in a statement in May they found that only a small percentage of policies cover infectious diseases. The authorities also determined that insurers would only cover instances where business operations were interrupted due to Covid-19 infections in the company and not related actions such as the loss of customers due to lockdown regulations.

To make matters worse, a number of insurers have made applications to the FSCA to withdraw cover related to infectious and contagious diseases from policies that are already in effect. 

“If insurance companies had actually come to the forefront, there would not be so much pressure and desperation from the restaurant industry to reopen their businesses,” says Alberts.

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If you are going to open it in a few weeks time what is the point of waiting by Government and not doing it right now?

If you are not going to open them in a few weeks time what are restaurants waiting for? If it is months they will all be bust anyway?

Only way is to open it and let people decide if they want to go or not?

This is a sad development for all because it goes beyond the loss of jobs and capital. Without your favorite neighbourhood drinking hole, where you can unwind with friends, the quality of life takes a big dip too. This on a day when the mayor of Moscow has just ended a two month lockdown and allowed restaurants to reopen immediately.

To think that all of this financial destruction serves no purpose at all. People’s livelihoods are being destroyed with these unnecessary lockdown measures by the day. The analysis from proper scientists and medical experts like Dr Glenda Gray, actuaries like Nick Hudson and economists like Mike Schussler, provide us with an abundance of proof that lockdown does more harm than good if it does any good at all. They even prove that lockdown is not successful at its most basic function of flattening the curve.

How can they justify these lockdown measures while an abundance of scientific evidence proves that it serves no purpose at all? The virus is no more deadly than the common flue. Obesity is a risk factor. Schools, restaurants, salons, gymnasiums, sports fields and churches are not risk factors. People with an unhealthy BMI, who suffer from uncontrolled diabetes, should implement protection mechanisms like social distancing while they go on a carb-restricted diet. The real killer with covid is insulin resistance and uncontrolled high blood sugar. Covid is a lifestyle disease in other words. The real risk factors are the consumption of refined carbohydrates and living a sedentary lifestyle.

It is clear, therefore, that the real killer is eating habits. People who are at risk should wear their masks when they sit at the dinner table or when they snack, to prevent the real lethal substance, high-GI carbohydrates, from entering their bodies. A carb-restricted diet provides the best protection against covid by far. Here we inconvenience an entire nation and destroy and economy because some people cannot manage themselves.

I don’t know that it is as simple as avoiding carbs, but what is clear from the world experience is that lockdown success is dubious. The first couple of weeks served one purpose and one purpose only – to give the medical services a chance to prepare for the wave of infections. Here are the facts as on 7 June – courtesy of the WHO and worldometers.info:
1. In the USA so far 1 in 175 people were infected and 1 in 3,033 of the total population died. Yet, if you look at the media, it almost looks as if half of America has died or is dying.
2. In Sweden the numbers are 1 in 230 and 1 in 2,167 respectively. Sweden has a higher average age – hence the higher death rate amongst those affected, although even there the average age of those dying is higher than the average life expectancy of the whole population.
3. In SA the rates are 1 in 1,287 and 1 in 62,163 respectively, but we are substantially behind the rest on the curve. Our peak is still approaching while they have had theirs. In the US the 14 day average daily infections dropped over the last two months from 29,000 per day to 21,000 per day. Remember that they have a population of 330m people.
I am over 60 and I am prepared to take the US odds any day.

Thank you. You are the voice of reason. The risk is ten times higher for obese individuals. Most of the casualties suffered from uncontrolled diabetes. It is correlated with age, but the correlation with uncontrolled blood sugar levels is much higher. A young diabetic’s risk is ten times higher than a non-diabetic 80-year old.

Type- 2 diabetes is a lifestyle disease. We must have compassion and understanding for everyone, especially for those who suffer medical conditions. I am not blaming anyone for their lifestyle choices, I am merely saying that the reaction to the virus is destructive and that is withing everyone’s powers to prevent complications due to covid. It has been proven that the immune system reacts positively within just a few weeks of following a carb-restricted diet.

If they went ahead and banned sugar, pies, white bread, sugary drinks, cake and high-fructose corn syrup, that would have made perfect sense. I would still not support such measures though, because individuals should have the freedom of choice to make their mistakes and to live with the consequences.

This Gov is not going to listen to anyone who has a different opinion to those that they have CHOSEN to consult.

This is the control they want. When they have decimated SA to a level that they can mange and control, then they will be happy.

As for the restaurant industry, it is in the mortuary way past ICU.And why? Do you think any of the Shisainyamas have close? Nope I have it on good authority that Soweto is alive and functioning. The upmarket places are closing all over. A different clientele on the whole.

I think that 50% will go straight from ICU to morgue.

Government deliberately bankrupting people and businesses.its sick.

The insurance industry response are appalling, why do you sell a policy, collect the premium ( pay handsome for little work commissions) and when the covered event occur abdicate responsibility.

I believe it is high time that insurers are named and shamed, we must have no loyalty to the dishonest, i will immediately look for another insurer ( even if it cost more, have done so in past ) .
Can the restaurant owners share there insurer and clauses so taht we can name, shame and leave them Q

Early reports would indicate that church attendance is not overwhelming. So why not let restaurants open and allow people to decide for themselves? If you want to take the risk, its on you. That said restaurants should restrict numbers, insist on masks for everyone and keep everything sanitised. But we cannot allow this massive sector to simply fail. It employs huge numbers of people. Further job losses need to be avoided at all costs.

You raise an interesting point.

“So why not let restaurants open and allow people to decide for themselves?”

I think our government hates individualism and personal choice as it clashes with their communist political viewpoint where the individual’s choice is subservient to the collective.

They will decide what is good for you, because they know better 😉

How does one eat with masks on ??

Funny all this sudden “reason” in letting people “be”..

Why does government put speed limits on roads??

Flood line for buildings???

Warning the “coffee is hot might burn you ” on McD idiot cups?

What at this moment seems private hospitals are going to get R14k per day a COVID is in ICU..so carry on playing this “logic” at least hospitals will cash in

My dear, please save me from yourself!!

End of comments.

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