Restaurants play an important role in Makhanda - help us survive, says local restaurateurs

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Monday, 2nd August 2021

“Please consider supporting our industry and help us fill our allocated seats in a Covid-19 safe environment before it’s too late.” That was a plea from Janine Harris of the Fork and Dagger restaurant in Makhanda. She stands with other struggling local restaurateurs who call on the community to help them survive and preserve local employment before it is too late.

According to a recent Statistics South Africa survey facilitated by the Rhodes Business School, Covid-19 caused just over 50% of surveyed businesses to temporarily close or pause trading and over 80% of the respondents’ business turnover was not within its normal range.

In June, President Cyril Ramaphosa announced the placement of the country under adjusted alert level 4 for two weeks, due to the worrying increase in the numbers of Covid-19 infections in South Africa. To break the trail of transmission, restrictions included the prohibition of alcohol sales, gatherings and sit downs at restaurants. In the extension of this lockdown, due to growing Covid-19 infections, restaurants got a bit of relief and were allowed to accommodate not more than 50 people. This remained in place until 25 July with the focus placed on limiting social contacts while preserving the economy.

While the country observed these lockdown restrictions and prior ones, businesses on the ground continue to be impacted, most notably restaurants, which have had a challenging time since the onset of the Covid-19 pandemic.

“Government should focus more on making sure that people are vaccinated instead of opening and closing businesses,” said Tafadzwa Dudu Nyakotyo from Olde 65. This local pub and restaurant on New Street had to temporarily close down during the recent lockdown level 4 because their business is dependent mainly on alcohol sales to operate. As a consequence, the staff could not be paid for three weeks. Nyakotyo said another challenge faced during the lockdown periods was the absence of their main patrons. “Grahamstown (Makhanda) is a unique town, in that the majority of customers are Rhodes University students. If Rhodes is closed, then that means there is less business available,” he said.

Revelations Coffee Shop owner, Lee-Ann Benson said her business has managed to survive with the help of a loyal customer base. However, it’s been challenging time from the start of the Covid-19 pandemic especially when restrictions do not permit sit downs and only permit deliveries and take-aways. And business doesn’t improve with every restriction that is imposed. “In the first two weeks [of lockdown level 4], business was very bad… we were down on our figures. We have however received a lot of people supporting us. Without that support, we would have been in a big big trouble”.

Now that the restrictions have been eased, she said that they can do sit downs and business has improved slightly. “But we are nowhere near pre-lock down figures,” Benson added.

Benson said she noticed that people were still cautious about going out. “And it won't change overnight. Also from a financial point of view, people just don't have that disposable income anymore. Everyone is struggling. But we do understand that restaurants are a luxury business.”

“We are thankful that customers are doing what they can to support us,” said Benson. She added that Revelations provided these customers and attracted new ones with different food options from take-away meals and daily specials to frozen meals that customers could stock up and enjoy anytime in the comfort of their home.

Red Café owner, Louise Boy said the biggest challenges facing her business during the pandemic were the Covid-19 restrictions. “It makes it difficult to plan what happens in a day,” she said. One positive that came out of the hardship was the way that the community came to their aid. “We do feel exceptionally happy by the support we received last year, we are very, very grateful for it and ask the community to continue doing so.”

During lockdown level 4 she noticed that lunch times were quiet. “There is a misconception that we are full during that time, my hopes are that people can continue to support us during lunch time as well.”

She said when students are not around and the absence of a live National Arts Festival – things have not been easy and they have had to work long hours and be open seven days-a-week to make ends meet. “So finding an off time is challenging,” she added. 

Boy said Red Café provides its customers with an option to eat outdoors and indoors - in a well ventilated space. “The indoor area has a sufficient air flow and the outdoor area has a beautiful scenic view of High Street.”

Even though The Cock House boasts modernised facilities and a top-class dining experience, they are also buckling under the pressure of the pandemic. “The restaurant is dead at the moment. The only part that is alive is the little business we get from accommodation,” said The Cock House Manager, Yvonne Gretton.   

Harris said local restaurants played an important role when it comes to employment in Makhanda. “Our small city of Makhanda is renowned for its quaint, innovative and enjoyable restaurants which flourish during the National Arts Festival,” she said.

“In the past, many establishments have relied on the income generated by this event to support their staff throughout the year. Covid-19 has unfortunately and understandably prevented the Festival from coming to our City this year. In addition to this, we have been faced by lockdown restrictions,” she said. Harris said that even by buying a cup of coffee goes a long way to help keep restaurants and eateries afloat and put food on someone else’s table. “Our community therefore pleads with you to support our hospitality industry before it’s too late… by helping us to fill our allocated seats in a Covid-19 safe environment,” Harris said.

Local businesses significantly impacted by lockdown restrictions

Stuck in a balancing act to preserve livelihoods while preserving the economy, local businesses have been heavily impacted by the lockdown restrictions.  This is according to a Statistics South Africa survey facilitated by the Rhodes Business School in which 110 businesses in Makhanda participated. Just under 60% of the respondents, within the hospitality, retail and construction fields, said they were not confident that their business had the financial resources to continue operating throughout the Covid-19 while just over 10% said they were.

Director Rhodes Business School, Professor Owen Skae confirmed that local businesses did take a significant hit from the pandemic but those who were in a strong position prior to Covid-19 have managed to ride the storm. He said it was optimistic to see those businesses that had survived and also seeing new businesses pop up during this period. “It shows that these business owners still see opportunity”. Skae said business continuity depends on the impact of future waves, and the vaccine coverage that will assist in reducing new infections. 

The Covid-19 crisis has also brought about change in the way that companies do business. Most companies are working remotely now.

And while we wait for the return of normalcy, Skae said he anticipated more businesses to work remotely and to place more emphasis in digital initiatives but many local businesses who rely on out-of-towners, such as parents who visit their children at school, will still play the waiting game for a while.  

According to a recent SA-Tied Working Paper, the Impact of Covid-19 on the South African economy - An initial analysis, “the only tool currently available to mitigate the demographic effects of Covid-19 is some form of lockdown to reduce contagion by breaking existing social and economic forms of contact”. The Paper however stated that such measures impose a severe negative shock on the economy, with immediate loss of economic activity followed by medium-term and long-term economic effects.

So where to from here? The SA-Tied Working Paper recommended that attention should now turn to developing a long-run strategy for navigating the pandemic that addresses both the health dimensions of containment and their economic fallout.

A survey of businesses in the hospitality, retail and construction fields

A majority of the businesses that participated in the Statistics South Africa survey operated in the hospitality, retail and construction fields. 80% of these businesses worked with less than ten people before the impact of COVID-19 and had an annual business turnover of less than R 2 million. When Covid-19 pandemic hit just over 50% of the respondents temporarily closed or paused trading and over 80% of the respondents’ business turnover was not within its normal range. Less than 30 % said they applied for, or plan to apply for, financial assistance to fund operations through Government relief schemes, a small business grant or loan, debt relief holiday and deferring payments, others had no plan for assistance. Just under 60% of the respondents said they were not confident that their business had the financial resources to continue operating throughout the Covid-19 while just over 10% said they were.

Surviving without any turnover

Close to 50% of the respondents said they could survive without any turnover for between 1 - 3 months. Close to 60% expected the impact of the Covid-19 to be substantially worse when compared to the financial crisis that occurred during 2008 and 2009.

Just over 50% said their businesses workforce was unable to cope with the impact of Covid-19. The measures included laying off staff in the short term and decreased working hours.

Some of the businesses were recorded to have worked remotely instead of at their normal place of work and had a robust enough IT system to handle the demand if more employees will be working from home.

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