'No TERS, no support, restaurants will be destroyed' - deliveries won't save us, industry warns

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Restaurants won't be allowed to serve sit-down meals for at least the next two weeks. (Getty Images)
Restaurants won't be allowed to serve sit-down meals for at least the next two weeks. (Getty Images)
  • Restaurants won't be allowed to serve sit-down meals for at least the next two weeks, as South Africa moves to level 4 of the national lockdown. 
  • Banks, landlords and suppliers must support restaurant owners during this time, industry representatives have asked.
  • Deliveries won't keep restaurants afloat, given the large percentage of commission charged by delivery platforms.

Restaurants and other eateries will only be permitted to sell food for takeaway or delivery until 11 July, announced President Cyril Ramaphosa on Sunday evening, as he announced that South Africa will move to more stringent level 4 lockdown regulations.

"This is because it is not possible for patrons to wear masks while eating or drinking in these establishments."

Ramaphosa warned that more contagious Delta variant has been detected in five provinces. and that indications are that the deadly third wave - which is currently engulfing the country - could last longer that the first (15 weeks) and second (nine weeks).

The seven-day average of new daily cases has now overtaken the peak of the first wave in July last year, and will soon overtake the peak of the second wave seen in January this year. 

To slow down the transmission of Covid-19, the new regulations including a ban on alcohol sales as well as a new curfew starting at 21:00. Travel in and out of Gauteng for leisure purposes will be prohibited.

Under the new regulations, restaurants will be limited to takeaways or deliveries: no sit-down meals will be allowed.

This is big blow for the embattled sector, which has been among the worst affected during the pandemic. After having to close their doors at the end of March in 2020, they were allowed to open for takeaways in May. Only in mid-June could they open for sit-down meals, but recurring alcohol bans, and continued hesitancy among patrons given the pandemic, have starved them from income. 

"Yet again, restaurant will be the hardest hit, with no discussions, no TERS [Temporary Employer/Employee Relief Scheme], no financial support," says Wendy Alberts, CEO of the Restaurant Association of South Africa (RASA). The UIF's TERS scheme, which paid workers in sectors that couldn't do business during the lockdown, ended in March this year.

She warned that the number of restaurants forced to close their doors have reached the "thousands" since lockdown started last year, and that this may be the final blow to many eateries.

'Industry will be destroyed'

"The industry is going to be destroyed."

Deliveries won’t save restaurants given the large commissions they need to pay third-party delivery groups, Alberts added. Some of these delivery groups, such as Uber Eats, has asked up to 30% commission on each meal ordered in the past.

Research by the Restaurant Collective, an organisation which represents sit-down restaurants, shows that most sit-down restaurants will suffer a net loss if they only do deliveries and takeaways, given these and other costs.

Alberts says it is critical for restaurants to get more legal protection against claims from their banks and landlords during the move to level 4, which may include lease and debt service deferments.

Landlords, bankers and suppliers will have to find ways to support restaurants as they are stripped of their income for the next two weeks, says Ocean Basket’s CEO Grace Harding, who’s the spokesperson for the Restaurant Collective.

While still not profitable, she says that some restaurants were finally "breathing" in the past few weeks.

The latest data from Statistics SA show that restaurants' income from food and beverages in February was still 30% below pre-pandemic levels. In January, their income was half that of the same month in 2020.

The latest closure comes at a very sensitive time for restaurants, but she says Ramaphosa had little choice, given the intensity of the third wave.

"Covid-19 is not over. We know in life things get worse before they get better. We are now at the bottom, the very worse place – things can only get better."

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