SA industries continue to battle with lockdown restrictions

BY: Kaya 959 News

The embattled liquor, restaurant, leisure, and tourism industries, which are still struggling to recover from the hard lockdown in the second quarter of 2020 and restrictions during the second wave, have been dealt a further blow with the latest lockdown restrictions.

“The Property Industry Group provided R3 billion rental relief to SMME retail tenants during the first hard lock down,” said TPN Credit Bureau CEO Michelle Dickens.

TPN analysis of the data indicates that even this substantial value of relief didn’t stem the flood of delinquencies, as tenants three months or more in arrears increased from 7% prior to lockdown, to 10% in April 2020 in the initial months of rental relief, peaking at 19.12%, or one-in-five tenants, more than three months in arrears in September 2020.

Dickens said as the economy opened up again in the last quarter of 2020 and first quarter of 2021, severe commercial tenant delinquencies improved to 15.42% by March 2021.

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“New level 4 restrictions will no doubt reverse some of these gains as business owners in affected sectors are struggling for their very survival,” said Dickens.

Although restaurants have been permitted to do takeaways, a significant portion of their profits comes from alcohol sales.

Co-owner of the Local Grill in Parktown North, Steve Maresch, said although his business is doing everything it can to make the takeaway space work, it is challenging. Finding packaging that travels well and preparing an expensive piece of steak in a way that allows it to be reheated without being overcooked is just the start of the restaurant’s challenges.

“Our rent is in arrears. We’ve been in this space for 18 years and although the local community and our landlord have been incredibly supportive and loyal in the past year, there is no denying that this has been a very difficult period,” he said.

He said they have depleted all their resources and have to close their doors.

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Effectively, Maresch will have to let go of 26 staffers, three managers and two co-owners.

Co-owner of the Turn ‘n Tender in the Cresta Shopping Centre, Mark Johnston, is facing a similar dilemma. The business, which is only three years old, is still trying to pay off new business debt.

“The alcohol bans have all put huge pressure on the business, significantly reducing turnover. And although we were slowly recovering from 2020, we had yet to reach pre-Covid turnover levels,” he said.

These latest restrictions mean that the business will be falling further into arrears as far as its rental payments are concerned.

Wendy Alberts, CEO of the Restaurant Association of South Africa, told Business Maverick that close to a million jobs in the restaurant industry will be at risk in the next few weeks.

SA was placed on lockdown level 4 last month. It is suspected that the government could extend the lockdown as more provinces continue to confirm a rise in the number of positive COVID-19 cases.

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Written by: Poelano

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