Sobering times for most restaurants: No alcohol means no profit

Johannesburg – SA’s restaurant owners are facing an uncertain future with many facing permanent closure as the Covid-19 virus continues to wreak havoc in the industry.

Arnold February, regional investment manager at Business Partners, said that increasingly more restaurants are opting to close their doors temporarily until lockdown regulations ease.

“With the curfew still in place and increasing fear around the new strain and second wave, many of these restaurants are struggling to operate at a profit. Furthermore, in SA, pairing meals with alcohol is a major part of restaurant culture – so much so that liquor can account for as much as 70% of a restaurant’s profit,” said February.

“With no end to the liquor ban in sight – and with the current curfew of 9pm crippling dinner trade – many of these eateries are operating at a loss and closing temporarily may prove more economical for some.”

SA’s commercial centre Gauteng and tourist favourites Western Cape and KwaZulu-Natal are the worst-hit provinces. Wendy Alberts, CEO of the Restaurant Association of SA, said the hospitality industry in SA faces more complications than many other industries because it relies heavily on alcohol sales and trading hours.

“We ran a survey in July and August last year and found a 30% closure rate [restaurants that have closed permanently] and there are those restaurants which have closed temporarily until their insurance has paid out,” she said.

SA Breweries last week announced plans to challenge the constitutionality of the latest alcohol ban.

The company on Friday said it was pulling investments worth another R2.5-billion from the country.

The brewer, owned by AB InBev, withdrew a similar amount of spending last year after a 12-week sales ban.

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