Lockdown levels 3 and 4; no panacea. What it really means for restaurants.
Johannesburg: After a near ten days of trading as a delivery-only business, the Mozambik Group (and likely many other restaurants) can confirm that allowances under eased lockdown alert levels have not necessarily softened the blow of the Covid-19 pandemic’s impact on the sector. In many ways, it has simply served to lift morale while leaving cash registers wanting.
“As has been reported, deliveries have shown to settle at around 20% of normal turnover,” says Mozambik chief executive Manny Nichas. “While it is better than nothing, it remains impossible to sustain a full restaurant infrastructure. Level 2 introduces takeaways and customer collections, but I doubt that it would have more than a 5% additional bottom line impact.” Nichas opines that actual sit-down restaurants will only see the light of day again early in 2021, “and that under social distancing conditions, restricting capacity and ergo revenues.”
The commercially untenable status quo means that restaurants would have to innovate, and quickly. “In a delivery or takeaway environment restaurants now have a greater competitor set as burgers, pizzas and more traditional hot food delivery items have had the delivery market sewn up pre-lockdown. This means that not only is it new territory to be totally reliant on this mechanism, but restaurants have had to re-engineer entire business models.” Nichas adds that Mozambik presently runs deliveries and, will soon ditto its takeaway business, on a reduced and more cost-effective menu. “Being able to do deliveries is no panacea, but rather a steppingstone to a new way of doing business.”
Mozambik is making use of all third-party delivery services, but it has also developed its own online ordering system. “External services devour a substantial chunk of a restaurant’s revenue and our own internal system has cut our cost of sale significantly.” The response from customers has been positive with orders through Mozambik’s system now equaling and at times exceeding volumes received from third party services. “It all adds up though, and ultimately it’s the support of our customers through any channel that we are appreciative of.”
In addition, the Mozambik Group is testing a grocery division where frozen and unprepared foods, off the Mozambik menu and carefully selected lines, are available for online purchase in Gauteng and Ballito. “Testing on this service has been phenomenal,” says Nichas, “and grocery retail will remain and grow into a key part of our new business. In the fortnight that Mozambik Groceries has been operational it has at times exceeded hot food sales.” He believes that it is not only price related, but value driven. “Quality married to a good price is always a winner.”
“We have a set of 6 initiatives that we are focusing on at the moment, rolling out each as they are completed,” says Nichas. These include further expansion of deliveries, retail and new business ideas for a forever changed marketplace. “I believe that while business will never be the same again, business will be new. It is up to restaurants to seek a middle ground with landlords, innovate, and do not expect to return to normal anytime soon, or ever for that matter.
“To survive, and even prosper, we need to partner with other brands, companies and individuals for the common good. We need to make sure we can look after our staff and positively contribute to our communities. The new normal, while yet to reveal itself in full, will be the science fiction of yesterday. After all, we are already in a place where 3 months ago, nobody could have imagined.”