SA Restau­rants Weather the Storm

Tourism Tattler - - CONTENTS - By Karl Westvig. Glen Fox­croft-Wil­liams, chef pro­pri­etor of Fox­croft Restau­rant.

The restau­rant in­dus­try in South Africa faces many chal­lenges, but there is some cause for op­ti­mism in 2017. In 2016, travel and tourism con­trib­uted R402 bil­lion or 9.3% of South Africa's GDP to the coun­try. This is an­tic­i­pated to grow to R412.2 bil­lion (9.4%) of GDP in 2017.

Restau­rants play a sig­nif­i­cant role in how tourists ex­pe­ri­ence this coun­try, but hos­pi­tal­ity is faced with chal­lenges that make op­er­at­ing in a tight­mar­gin in­dus­try par­tic­u­larly dif­fi­cult. Among these chal­lenges are the ris­ing costs of do­ing busi­ness, with food in ation chief among these. In 2016, food in ation peaked at 11.7%, but even now that it has dropped to be­low 6%, the ef­fects of last year's spikes are still be­ing felt. Even more wor­ry­ing is that the con­tribut­ing drought hasn't even taken full ef­fect yet in key agri­cul­tural re­gions in the Eastern and Western Cape. The drought has a more di­rect im­pact in terms of wa­ter con­sump­tion as well. Wa­ter us­age is re­stricted, and us­age penal­ties have been im­ple­mented in some ar­eas. This means that restau­rants, which use wa­ter to main­tain stan­dards of hy­giene and to cook the food that they pre­pare, aren't op­er­at­ing within the usual struc­tures of ‘busi­ness as usual' while try­ing to make their con­tri­bu­tion to the econ­omy of South Africa. In ad­di­tion, there are the typ­i­cal con­cerns that face the in­dus­try in­clud­ing high staff turnover and skills short­ages, bad debts and cash- ow con­straints, and the need to con­stantly adapt to con­sumer needs and ex­pec­ta­tions. These chal­lenges are par­tic­u­larly hard felt by new restau­rant own­ers, who are at­tempt­ing to make a name for them­selves in a com­pet­i­tive in­dus­try. Ac­cord­ing to Glen Fox­croft-Wil­liams, chef pro­pri­etor of Fox­croft Restau­rant, the chal­lenges in open­ing a restau­rant cover a broad spec­trum, from estab­lish­ing brand iden­tity, find­ing your mar­ket and forg­ing an ethos for your team. The Con­stan­tia based restau­rant won the Eat Out Re­tail Cap­i­tal New Restau­rant of the Year Award last year. As Fox­croft was Glens' first foray into run­ning a kitchen – never mind a restau­rant as a whole – the learn­ing curve has been steep. “Win­ning the award was a huge morale boost for my team who had worked so hard in get­ting the restau­rant up and run­ning,” says Glen. “It served as a val­i­da­tion of our hard work up un­til that point, and let us know that we were on the right path. It also made a no­tice­able change to our reser­va­tions, in­creas­ing our wait­ing lists by at least 50%. We are very thank­ful to Eat Out and Re­tail Cap­i­tal for this recog­ni­tion.”

A large num­ber of Re­tail Cap­i­tal's clients are in the restau­rant busi­ness, and from the van­tage point of sup­port­ing them through their fi­nan­cial chal­lenges, there are key ar­eas that those in the hos­pi­tal­ity in­dus­try need to fo­cus on to en­sure their busi­nesses weather the storm.

These in­clude keep­ing up with in­no­va­tion in the in­dus­try such as the role of tech­nol­ogy. From a day-to-day per­spec­tive, mak­ing them­selves aware of hid­den costs is crit­i­cal but so too is the staff com­ple­ment. Train­ing staff well and con­sis­tently over time, in­cen­tivis­ing their staff, and pro­vid­ing ex­cel­lent lev­els of ser­vice and con­ve­nience and that lit­tle some­thing ex­tra for their cus­tomers – these all need to be taken into ac­count.

There is some good news ahead, as sum­mer is the busy sea­son, and in 2017, there is cause for op­ti­mism across the whole in­dus­try.

South Africa's weaker rand keeps the coun­try's tourism ex­pe­ri­ence af­ford­able, there­fore we're an­tic­i­pat­ing an in­crease in in­ter­na­tional tourists vis­it­ing SA dur­ing the fes­tive sea­son.

This also leads to less South Africans be­ing able to af­ford over­seas hol­i­days, with the re­sult that South Africans will spend more lo­cally, which sug­gests a pos­i­tive out­look for the hos­pi­tal­ity in­dus­try over the com­ing fes­tive sea­son.

The Eat Out Re­tail Cap­i­tal New Restau­rant of the Year Award win­ners will be an­nounced at the an­nual Eat Out Mercedes-Benz Restau­rant Awards on Sun­day 19 Novem­ber 2017.

About the au­thor: Karl Westvig is the CEO of Re­tail Cap­i­tal, providers of flex­i­ble and con­ve­nient busi­ness fi­nance. www.re­tail­cap­i­tal.co.za

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