Yesterday I was requested as a restaurant writer to prepare a submission for an urgent court proceeding to be brought against Trade and Industry Minister Ebrahim Patel, should he not meet the demand by today 6 July of restaurateurs that restaurants be allowed to serve alcohol with meals served, and to allow the distance rule for persons sitting at the same table to be reduced from 1,5 meters. The matter is being handled by Advocate Theo Nel, with support if the Karoo Art Hotel in Barrydale, and Chef Liam Tomlin’s six restaurants, including three Chefs Warehouses.
In preparing my document, I came to the conclusion that the restaurant industry in our country has been the one most severely discriminated against, given the number of hoops and hurdles it has had to deal with in terms of do’s and dont’s in the period just before Lockdown commenced, and the 102 days since it commenced!
This is my submission I sent to Advocate Nel late last night:
‘TO WHOM IT MAY CONCERN
Earlier today I was approached by Theo Nel, Owner of the Karoo Art Hotel in Barrydale, who is driving a concerted campaign on behalf of the Restaurant industry in the Western Cape to allow Alcohol to be enjoyed with a meal in our licensed restaurants, and the removal of the 1,5 meter distancing prescription between diners at the same table, to write a motivation from the perspective of a restaurant writer. I have written about Restaurants for the past 12 years on my Whale Tales Blog
I have a B.Comm (Hons) cum laude from the University of Stellenbosch and an MBA from the University of the Witwatersrand Business School. I have worked with food companies as Public Relations Consultant when I owned Relationship Marketing. I have served as Chairman of the Institute of Marketing Management, created and wrote the Ad-Monitor Advertising and Marketing column for the Weekend Argus, and created and presented the Sweet & Sour Service Excellence Awards on Radio Good Hope and Kfm.
I owned four Guest Houses in the Western Cape for close to twenty years, each called Whale Cottage. As part of my marketing of the Whale Cottage Portfolio, and to satisfy my love for writing, I started writing a newsletter called WhaleTales, which quickly became a must-read in the tourism industry. I have served on the Board of Cape Town Tourism as its Deputy Chairman, and have been a Director of FEDHASA Cape, chairing the Small Accommodation segment. I established Guest House Associations in Camps Bay and in Franschhoek, the foundation of which was active networking with guest house colleagues for the benefit of all.
The WhaleTales Blog was started in 2008, and has a readership of over 30 000 unique readers per month. The Blog was selected as a Top 10 Finalist in the “Most Controversial” Blog category of the 2010 SA Blog Awards. I present a Sweet & Sour Service Award every Friday. The WhaleTales Blog focuses on Restaurants, Tourism, and Wines, with a Cape Town and Winelands focus. I am regarded as the most honest Restaurant Reviewer in our country, and our most widely traveled international reviewer, having eaten at World’s 50 Best Restaurants in Paris, Menton, Lima, London, Santiago, Buenos Aires, Rio de Janeiro, Lisbon, and New York.
During Lockdown I am keeping herself busy in writing about the Covid-19 Lockdown regulations of our Government, and its impact on the restaurant industry. I created a Facebook Group listing all the restaurants and home cooks offering a Food and Alcohol Delivery and Collection Service in Cape Town and the Winelands, to assist the Restaurant industry. https://www.facebook.com/groups/261165661682371/?ref=share
Our Restaurant Industry has been put through five serious hurdles since March 2020:
- In March it was announced that our country had its first Corona Virus case, and citizens of our country were advised to wash their hands, to practice Social Distancing, and to wear masks. Restaurants were restricted to a maximum of 50 persons at any one time, including staff, during a month which is traditionally a good month if Easter falls into it, and if Human Rights Day creates a long weekend. International tourists were still in our country at the time, although some left early to return to their home countries. For fear of their staff and their clients, many restaurants in Cape Town, especially fine-dining restaurants serving almost exclusively international diners, closed their doors immediately and went into a 14 day precautionary quarantine. This cut their revenue for March to half.
- On 23 March President Cyril Ramaphosa announced that Lockdown, later defined as Level 5, would be introduced three days later, on 27 March. It was announced as a 14-day shutdown. Those restaurants which were still operating had three days in which to close up and secure their restaurants, and to inform their staff of the regulations. No trading of any kind was allowed. Before the two week period had expired, its extension by a further three weeks was announced, ending on 30 April. In this second extended phase of Level 5, some coffee shops offered coffee on a Take-away basis, some selling pastries too. This soon became a grey area, some coffee shops only allowed to sell coffee, and others coffee with pastries too, depending on the definition of the regulations by the police station governing the suburb/town. Only a handful of restaurants, namely coffee shops, managed to generate some income. Slowly restaurateurs and coffee shop owners recognised that if they reclassified their businesses as selling Essential Food items, they could continue with their coffee and pastry sales. Only a handful of businesses benefitted from this reclassification. And the crying shame for the restaurant industry is that it lost its last spurt income over the Easter weekend, plus that of the long weekend linking Freedom Day on 27 April with Workers’ Day on 1 May. The first headaches appeared for restaurant owners and managers, in trying to claim UIF/TERS for their staff: some staff were paid but not all, and foreign staff (mainly from Malawi and Zimbabwe, preferably employed in the Hospitality industry due to their work ethic) received no payouts. April is the last month for a restaurant to generate a reasonable income before winter sets in, traditionally a very poor revenue period lasting until September.
- On 1 May Level 4 was introduced, and Restaurants were (surprisingly) allowed (at very short notice) to open their kitchens for Food Delivery. Many more upmarket restaurants were not prepared to change what their restaurants stood for, Take-Away Deliveries not being what they had ever intended for their restaurants and their resultant image, not matching the level at which they were operating image-wise. While a number of restaurants were keen to open for Deliveries, they were disappointed with the revenue generated, as customers were not keen to order through a third party delivery company, especially Uber Eats (charging an astronomical 30% delivery fee) and Mr D, with health concerns too and reports of the driver-deliverers eating customers’ Food when customers did not answer the doorbell quickly enough, or part of the meal prior to Delivery. Proactive restaurants offered their own delivery service, using their staff. Slowly an increasing number of restaurants entered the Food Delivery Industry, putting the negative image connotations to one side, survival now becoming key in not having earned any income for five weeks. Eat Out Top 10 Restaurants FYN, Wolfgat, and La Colombe joined the Food Delivery Club, only three out of the top ten restaurants. Problems in obtaining payment for UIF/TERS claims persisted. Very little, if any, relief funding was received by restaurants, so generously announced by the President at the beginning of the Lockdown.
- On 1 June Level 3 was announced, with restaurants allowed to offer both alcohol sales from their restaurants if they held a liquor licence, operating as ‘bottle stores’, as well as allowed to have their Food collected from restaurants by customers. This was an exciting step forward for the restaurant industry, but customers were concerned about the alcohol mark-ups restaurants would charge, usually charging three times the cellar door price. However, Restaurants and all liquor outlets were restricted, in that alcohol sales were only allowed Mondays to Thursdays, from 9h00 to 17h00. Slowly restaurants placed chairs and tables outside their doors, to attract attention to them being open for Delivery and Collection. In the suburb Camps Bay, where I live, only seven out of 24 restaurants initially offered this service, two restaurants closing down permanently during the month, and one stepping out of the Food and Alcohol Delivery and Collection Service after a short trial. Problems in obtaining UIF/TERS payments for staff continued.
- On 30 June restaurants were allowed to open for Sit-Down service with devastatingly strict regulations in terms of customer distancing, and even worse, that no on-site alcohol consumption would be allowed! This led highly respected Chef Liam Tomlin to write on Facebook as follows:’Dear Mr. President, ( Dlamini-Zuma). I fail to understand who is going to supplement the income of our staff from 01 July. From my understanding TERS, for whatever promises it is worth ends in a few days time.You are expecting fully paid up licensed restaurants to trade as coffee shops.It doesn’t make sense’. Adding to this was Restaurateur Giles Blanc, who wrote a week ago that he was not opening his Camps Bay Restaurant The 41 any time soon, for the following reasons:
‘Why re-opening restaurants tomorrow Monday is NOT a good idea for the industry
I have seen a lot of restaurant business owners getting very excited about the re-opening of restaurants without the possibility to sell alcohol. I understand that we ALL want to be back into our shops and to start operating as before, but re-opening in these conditions may actually make our situation WORSE.
1. Restaurant business models are not sustainable without the sale of alcohol. 70 to 80% of the profit (NOT turnover, but PROFIT) in a restaurant comes from the bar. Running a restaurant without a bar is actually the best thing to lose money every single day you operate;
2. During winter months, and even with a drastic reduction in staff, most restaurants struggle to even break even, so how can restaurants break even with no alcohol?
3. Do not forget that new sanitary protocols are a new fixed cost. Just for 1 of my restaurants, this accounts for R500 a day; besides, do not forget all the hidden costs like staff transport…
4. The international market (wealthy spenders) is gone and the local market is broke. Youngsters go partying with alcohol in private parties, and elderly people, the ones who have the biggest purchase power, will be too scared to eat out because of the virus… Who are you going to work with?
5. Last but not least, re-opening massively the restaurants is not a good sign sent to the government. They may think that we are happy operating without alcohol. We need to show that restaurants CAN NOT SURVIVE without alcohol so we can keep pressure on the government. There are a lot at stake: employment, direct and indirect taxes…In substance, what I am trying to say, is that re-opening your restaurant now would affect dramatically your cash flow and may bring you to bankruptcy earlier than expected. I recommend that you keep your hibernating mode, protect your cashflow to re-open, and keep pressure to government so we can trade with alcohol the soonest. We still do not know how long this crisis will be…
Take care,
Gilles Blanc
Esus-Group’
In my opinion there is no other South African industry which has had to jump through so many hoops and has been so discriminated against as the Restaurant industry, some having had to change from coffee shops to Grocers, and others from esteemed restaurants to Take-Away outlets, and in many instances becoming ‘Bottle Stores’ too, each time having to change their business model, usually at very short notice. And a sword hanging over their heads has been the problems experienced and time spent in chasing UIF/TERS payments for their staff.
Given an estimated employment of 800000 staff by restaurants before Lockdown, most restaurants had to retrench almost all their staff, not being able to pay them without generating income for their businesses. Today I popped in at La Parada Constantia Nek, usually a bustling restaurant on a Sunday, which reopened three days ago. Today there were only 6 tables occupied, served by one waiter, with the two managers assisting him on the floor. Needless to say the Service was disappointing, as staff who have not worked for more than three months have to relearn their job at very short notice, and have to learn the Corona regulations. Bad service experiences may lead diners to order Food in and to enjoy it at home, with their own alcohol. Numerous consumers fear the hygiene aspects of sitting and eating at a restaurant again.
While there must be thousands of Restaurants out there, I have only been able to track about 200 of them as having reopened for Sit-Down Service since 30 June, the balance having closed down permanently or are waiting until alcohol drinking in a restaurant is allowed again.
Restaurants offering Sit-Down service in Cape Town and Winelands in Lockdown Level 3: a First List!
I am doing a running list of restaurants which have closed down permanently in the Cape, and this list already exceeds 40, some of these restaurants having operated for 20 or even 30 years!
The Restaurant industry is already on its knees, given the hurdles it has had to deal with in the past close to four months, as outlined above. It is estimated that 70% of restaurants will be closing down permanently, due to the lack of international tourists, the lack of alcohol sales with meals in restaurants, the lack of government relief funding, and the dire straits in which South Africans find themselves now, with payment holidays extended initially for the first three months of Lockdown now falling away. The Restaurant industry is a major employer of staff in the hospitality industry. For it to survive, it needs to be allowed to serve alcohol with meals, and to reduce the distance regulation of persons sitting at the same table!
Chris von Ulmenstein
Editor
WhaleTales Blog.
Contact details: Chris von Ulmenstein , Cell 0825511323, chrisvonulmenstein@gmail.com www.chrisvonulmenstein@com/blog,
Twitter:@Ulmenstein Facebook: Chris von Ulmenstein Instagram: @chrissy_ulmenstein’
Photograph: Taken at a late lunch at La Parada Constantia Nek yesterday afternoon. Only six tables were occupied.
Chris von Ulmenstein, WhaleTales Blog: www.chrisvonulmenstein.com/blog Tel +27 082 55 11 323 Twitter:@Ulmenstein Facebook: Chris von Ulmenstein Instagram: @Chrissy_Ulmenstein
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