Survival is possible as sector stares down the barrel of a bleak future.
Johannesburg: The food and beverage industry will be picking up the pieces of a disastrous 5 weeks of zero income post the national lockdown in May. The sector, that relies on thin margins and dealt with an already dwindling economy pre-Covid-19, is all but decimated. With more than an estimated 100 000 jobs on the line, the industry is subject to an uncertain future, add to this the likelihood of a further partial lockdown with trading restrictions and social distancing stretched through to September, tomorrow becomes bleak.
“It has been a recipe for disaster,” says Mozambik CEO Manny Nichas. The group has 17 stores with another 5 that were due to open between March and June. “Innovation, lateral thinking and agility are the only keys to survival.” He says that restaurants operate on notoriously thin margins and tight cash-flow. “Combine a service industry with perishable goods, add declining disposable income and Covid-19; it’s a recipe with a bitter outcome.” He says that restaurants that survive lockdown must prepare for at least 5 months of restricted trading.
Recent studies suggest that South Africa will reach its peak Covid-19 infection rate in September this year. “A phased opening-up of the economy is a national necessity come 1 May, but likely with restrictions similar to what we experienced pre-lockdown.” Nichas says that he expects restaurants to be allowed to open next month, but, initially only as a takeout or delivery service under strict hygiene conditions. “Normal trading, if you can call it that, whether immediate or likely only a month or two later, will be subject to social distancing and severe capacity management and time limits on the sale of alcoholic beverages.”
“The time to prepare is now,” he says. “At Mozambik we have overhauled our standard operational procedures to permanently implement social distancing in-store, contactless take-away collections, staff wellness management and overall extreme sanitization measures.” Nichas adds that Mozambik will focus strongly on take-out and deliveries. “During lockdown we developed our own click and collect and in-house delivery system to enhance our service offering. We will also be launching a loyalty programme along with a Kid’s Club.”
Further brand extensions will also be advanced and launched. “We have already developed a Holidays by Mozambik brand that offers value escapes from the rat race with additional products and services presently being finalized to form part of our greater lifestyle offering.” This will include online retail, development of a distribution system to assist smaller restaurant groups with procurement and more. “Hedging against the short and medium to long term impact of Covid-19 is critical for any business, and this also means venturing into new territory and new markets through innovation and a lateral approach to solving a serious challenge.”
Restaurants can and will survive, albeit likely that things will never be the same again. “Preparation means everything.” Nichas notes that the Mozambik group plans to make as many initiatives available to the wider industry where possible in support of recovery and stability moving forward. “We may be competitors on one level, but we are brothers in arms when it comes to saving the industry.”