Outgoing Spur CEO: Covid-19 is worse than the global financial crisis

Outgoing Spur CEO Pierre van Tonder says he will miss the people he worked with when he retires. Photo: Lerato Maduna
Outgoing Spur CEO Pierre van Tonder says he will miss the people he worked with when he retires. Photo: Lerato Maduna
  • Spur Corporation CEO Pierre van Tonder is stepping down after 24 years at the helm.
  • He has seen the group through many successes, and some challenges, including the global financial crisis - but says even that might have been better to navigate than the Covid-19 pandemic.
  • He will not be slowing down anytime soon, as the "young 60-year-old" believes his experience can be leveraged to add value in other organisations.

Pierre van Tonder was still in school when he took on his first job as a waiter to earn extra money.

He joined Spur in 1982 as a junior restaurant manager and became CEO in 1996. 

Under van Tonder's leadership, Spur expanded its brand portfolio to include Italian food chain Panarottis, burger joint RocoMamas, steak restaurant The Hussar Grill and seafood restaurant John Dory's. It now boasts more than 640 restaurants in South Africa and has a presence in 20 countries.

The addition of RocoMamas and The Hussar Grill were particularly positive for the group's performance. The June 2019 annual results showed the brands RocoMamas and Hussar Grill grew restaurant sales by 7.5 and 13.4%, respectively.

'The UK was a big disappointment'

But, said Van Tonder, there have also been some "failures".

"The UK was a big disappointment for me," he recalled.

Spur closed its UK-based operations in 2016 to focus on its alternative international markets, including Africa, the Middle East, Australia and New Zealand. But van Tonder said there was positives about the UK business, and these were introduced to the South African business.

The Australian business was also disappointing, said van Tonder.

"It's been a continuous drain for us, not only financially but also from a support point of view, mentally," he added.

In the previous financial year, Spur reported declining sales for its Australian and New Zealand operations following the closure of three restaurants, Fin24 previously reported.

"I have had my highs and my lows."

Van Tonder credited his experience on the restaurant floor as being invaluable to his later career in management.

"I was fortunate enough to join Spur at a very young age. I learnt from the back door to the front door. It always gives me a sense of passion for this industry."

Accordingly, he advised anyone joining the restaurant industry to understand the dynamics of the restaurant floor, kitchen and controls.

"You need to understand all of that because you need to make strategic decisions at a higher level. If you do not understand that, you would be making the wrong decisions and the impact on the restaurant floor could be considerable."

That understanding helped Van Tonder steer the group through considerable turbulence. He led the group through the 2008 global financial crisis, but he believed the impact of Covid-19 was worse.

"I would take 2008 before 2020," he told Fin24.

"There is no question in my mind, Covid-19 is worse."

According to a trading update issued in May, the group's restaurant sales during March and April "slowed dramatically" as a result of the lockdown. Trading was halted from 26 March when the lockdown was implemented. Following the announcement of the national state of disaster earlier in the month, sales for the two weeks between 16 and 31 March declined 75.7% compared to the prior period.

The group essentially did not earn any income between 27 March and 1 May.

"The whole dynamic is different," Van Tonder said of Covid-19. Restaurants had to close temporarily, no liquor licences and social distancing also changed dynamics.

He added the way restaurants operated would certainly change, and there was now a growing emergence of technology platforms such as online food delivery, home-prepared meals and delivery only restaurants or virtual kitchens.  

"If you do not look at the technology platform and think of how to do business differently, I think you are going to be left behind."

Van Tonder said the industry would recover, but would probably operate in a new normal, adding those entering the industry should also understand how it would operate in the "new world".

He added people would continue to go to restaurants, as long as they could be assured safety measures were in place.

Learn to listen

A major lesson he has learnt in his career was the importance of listening.

"People are very important to your learning process, especially the team members you work with within your company.

"One of the most valuable lessons I learnt in my business career is to always to listen to the opinion of other people - whether you agree or disagree."

Van Tonder said his engagements with franchisees have been beneficial in his mapping out a strategy for the group.

He will miss the interactions with the team he has worked with over many years, including the franchisees.

"Each and every one of them has had a special role to play in the success I have had, and I will miss them. It is very difficult to walk away after many, many years," he said.

But van Tonder is not yet ready to slow down, and sit by the sea or go fishing, as he put it.

"I am a young 60, and I am sure that I can add value in other businesses," he said.

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