Covid-19 taking toll on restaurants

At least 2 500 casual workers normally employed by sit and dine restaurants are currently out of work as the sector has been hit by the Covid-19 pandemic and the associated lockdown restrictions, Business Weekly can report.

Restaurants across the country normally employ casual workers during busy periods, but have not been able to do so due to the pandemic, Restaurant Operators Association of Zimbabwe (ROAZ) president Bongai Zamchiya told Business Weekly during the live online broadcast programme State of the Market.

Zamchiya said given the extent of the lockdown periods, a lot of restaurant owners did not have capital to sustain their operations and ‘’one of the things they ended up doing was having to cut employees (as) difficult as it was.”

“At the moment we are estimating that about 2 000 jobs have been lost within the industry.”

In his own business, Zamchiya, who runs Pariah State restaurants, had to reduce employees from a peak of 120 in January 2020 to the current 30 to 35 employees.

“Some of those jobs have gone forever, and it’s the reality we have to face” he said.

Zamchiya said between 300 and 400 restaurants are teetering or on the verge of not opening due to the impact of Covid-19. Zimbabwe has approximately 900 restaurants employing at least 9 000 permanent workers.

“That’s a material number. We are also receiving information from our membership that a lot of tenants have been given notice by their landlords.

“Landlords don’t want to carry the risk of having a restaurant as an operator because you are in a position where effectively you could get shut down any day.

“While our landlords can be in a position where they can feel a level of sympathy towards their various tenants, ultimately landlords are looking at getting a gain out of their asset, they are looking to get rental,”Zamchiya said.

The impact of the coronavirus pandemic on restaurant operations will also have a significant impact on revenue to the Zimbabwe Tourism Authority (ZTA) where they contribute 2 percent of their turnover in the form of levies.

According to Zamchiya restaurants contribute about 40 percent of the total revenue ZTA makes.

“During the Covid-19 period, particularly with hotels being affected by the absence of inbound tours and operating business, restaurant contribution when we were in a better position to operate rose as much as 60 percent of ZTA’s revenue.

“So we are a key participant,” Zamchiya pointed out.

He however said the industry had not got any support from government and yet there are costs to be met including licence renewals with ZTA and local authorities.

Zamchiya said while restaurants are currently allowed to open, the curfew hours mean not much business can be conducted.

Restaurants by their nature draw 70-80 percent of their income from night trade, while the takeaway business contribute between 15 to 20 percent, according to Zamchiya.

“When you immediately do not have night trade you have significant inability to generate the right levels of revenue.”

With takeaways only, restaurant businesses were not in a breakeven position according to Zamchiya.

Going forward Zamchiya said there is now need to learn to live with the pandemic just like what is happening in Europe where football stadiums are full of people again.

“We need to continue.”-ebusinessweekly.co.zw