Restaurants form lobby group as lockdown takes a big bite out of business

BERLIN: Unoccupied tables and chairs from closed cafes and restaurants can be seen in the Nikolai quarter in Propststraße. (Jens Kalaene/dpa-Zentralbild/ZB (Photo by Jens Kalaene/picture alliance via Getty Images)
BERLIN: Unoccupied tables and chairs from closed cafes and restaurants can be seen in the Nikolai quarter in Propststraße. (Jens Kalaene/dpa-Zentralbild/ZB (Photo by Jens Kalaene/picture alliance via Getty Images)
Jens Kalaene

Sit down restaurant chains have come together under the banner of a new lobby group – the Restaurant Collective – to advance a set of proposals regarding business activity under Level 3 lockdown in the sector, which has been rocked by the novel coronavirus.

The lockdown, aimed at wresting the spread of the coronavirus, has hit restaurants hard due to restrictions on business and general movement.

Last month Tashas founder Natasha Sideris - like many others - said sit down restaurants would likely remain loss-making for a while, even after lockdown ends, arguing that it might be better to remain closed than to operate under the prescribed conditions.

Sideris said while the Restaurant Collective appreciated the difficulty of government's situation, it was imperative that the fallout from the lockdown should be managed with maximum care.

'New challenges and uncertainty'

"Covid-19 brings new challenges and uncertainty to all. As a sit-down restaurant industry we want to be sure we are at that table to ensure that the challenges of all stakeholders are heard so we can ensure a win-win situation for all involved," said Sideris. 

Sideris said the Restaurant Collective would be happy to comply with requests for restaurants to sell liquor within certain hours, or only when accompanied by a meal. She said the lobby group wanted clear long-term plans from government on how to address business concerns and how to re-open the economy safely.

"As can be expected, the processes have been, administratively, quite intense. Many have been helped, equally many are still waiting for assistance. If we are not allowed to open, the bigger question remains what happens after June?" she said.

The Restaurant Collective calls itself a non-profit, no-fee group representing all sit-down restaurants in South Africa. The group says it seeks to work with government, landlords and banks to "effect permanent change and equitable policies that support the greater good of all involved".

Restaurants that have signed on to the Restaurant Collective include Tashas, Signature Restaurants, the famed Sakhumzi restaurant of Soweto's Vilakazi Street, Piza e Vino, seafood franchise Ocean Basket and Doppio Zero.

According to a statement, Restaurant Collective’s 12 members have a combined 512 sit-down restaurants around the country. The group said it will address the challenges created by the Covid-19 lockdown and ongoing trade and operations in the South African economy.

From lockdown to long-term wages

"For the longer term, we will address additional issues, many pre-existing, that are further reaching with the aim of building a strong, resilient foundation for the industry as a whole to thrive," the Restaurant Collective said.

The group said during lockdown, it wants the immediate approval of call and collect services for sit down restaurants and for trading hours to be extended until 21:00. The group said sit down restaurants should be allowed to open with necessary restrictions under Level 3 lockdown.

The group also called for a review of the minimum wage approach for all restaurant staff, the financing of training and up-skilling of staff, effective and efficient liquor license procedures, and that authorities establish, document and agree to clear rules for health and safety.

The Restaurant Collective also calls for payment holidays and alternative arrangements from restaurant landlords, new debt financing mechanisms from banks and new working models with aggregators in delivery.

Restaurants 'really suffered'

Analyst Simon Brown said the formation of the lobby group has been a positive development, as he believes sit down restaurants can have their concerns heard better when speaking collectively.

"From lockdown until the beginning of May, restaurants really suffered. They still have their expenses in terms of staff, franchise fees and rental. Subsequently, some have reopened for delivery via Uber Eats. That alleviates pressure, but the fees can be up to 33%," said Brown.

Brown said the easiest intervention government could make to assist restaurants was relief, as many businesses in the sector were suffering from bottleneck constraints from the beginning of the pandemic in April.

"We have seen that from government-backed loans that started this week. It's a temporary measure that helps. If you reopen restaurants, the immediate flip side they would see expected restrictions on seating," Brown said.

He said seating restrictions would be less than ideal for most restaurants, as these businesses typically use revenue from the first 80 seats for paying costs and all additional seats to make an actual profit.

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