It is no secret that the restaurant industry has suffered massive losses due to the current COVID-19 pandemic. A little relief has come from the Government’s latest announcement that restaurants will now be allowed to offer their customers the option to eat-in rather than just order takeaways and deliveries. However, there will be strict measures put in place to enforce social distancing which means that many restaurants will not be operating at their maximum capacity, which means a further loss in revenue. It also means that as a customer, you will not necessarily be able to eat at our local pizza place or burger hangout when you want to because of space constraints.
The restaurant industry has been among the hardest hit due to the lockdown, with many owners unsure about whether they will be able to open their doors again or not.
Sadly, this nightmare prospect has already become a reality for many: several high-profile restaurants have already succumbed to the effects of the lockdown, with a number of big-name international restaurants closing down one or more of their locations over the past few months.
For example, the Momofuku restaurant chain has permanently closed at least two of its stores in New York and Washington DC. Businesses on the local front have not been spared either. Popular local restaurants SMAK Delicatessen, The Shortmarket Club, and The Kitchen have all been forced to close their doors permanently due to the lockdown conditions imposed by the Coronavirus, and national chains such as Mugg & Bean have also had to close some of their branches. Since many restaurants, cafes, and coffee shops derive the bulk of their income from sit-down customers, hundreds of thousands of restaurant staff have been laid off and millions of Rands worth of revenue has been lost.
The level 3 COVID-19 lockdown regulations initially made provision for restaurants to offer takeaways as well as open their drive-through services, but sadly, for many, this was not enough to save them. More recently, the South African Government has announced that restaurants will now be allowed to offer customers a seated service, which means that they can open and trade again in some semblance of normalcy. Time will tell exactly what the restrictions will be when it comes to eating in, but this is a much-needed lifeline for an industry that has suffered severely.
The stark reality
According to some reports, South Africa is projected to lose as many as four million jobs this year due to the lockdown restrictions imposed as a result of the Coronavirus outbreak. A large portion of that number is said to come from the restaurant industry.
At the time of writing, more than 33 restaurants in Cape Town alone had permanently closed their doors, and more closures are sure to follow.
This is just a snapshot of the reality that most restaurants are currently facing.
Are delivery services helping?
The easing of certain COVID-19 regulations as we went into Level 3 of the lockdown saw food delivery services begin to operate again. Theoretically, this should have provided some relief to the restaurant industry as restaurants and cafes were now able to offer food to their customers and have it delivered. This has allowed them to generate some sort of income, albeit limited.
However, there is mounting evidence that delivery services may be hurting businesses, rather helping them. Many restaurants are struggling to keep up with the fees and commissions that delivery companies are currently charging.
According to reports, companies such as Uber Eats, GrubHub and DoorDash are charging up to 30% of customers’ orders to deliver food.
These fees are negatively impacting restaurants’ already razor-thin profit margins. One American restaurant owner recently highlighted the struggle by posting a receipt online. The receipt revealed that 70% of the value of his food sales had been swallowed up by the delivery company’s fees and commissions.
While this may not have been a major issue before, due to restaurants mainly earning income from sit-down customers, the current COVID-19 crisis has shone a bright spotlight on the difficulty of the situation.
Restaurants make use of third-party delivery services due to convenience and popularity with customers but are seemingly getting very little out of the deal. It is the delivery service, rather than the restaurant, that is benefitting from the current situation.
The situation has become so dire that many restaurants are now reaching out to customers and asking them to order items directly, rather than use delivery apps. Other companies are simply increasing their prices to compensate for the fees and commissions being charged.
Are there any other options?
As restaurants, cafes and coffee shops continue to battle with the exorbitant costs of using third-party delivery services, many are now pushing for their patrons to order, pay directly, and collect their meals.
Several companies have begun exploring viable alternatives to help restaurants.
UBU International, for example, has created a unique solution that can greatly benefit restaurants. Restauranteurs can join the growing UBU Marketplace and expose their offerings to thousands of potential customers. UBU allows customers to order, pay for, and collect their food via a mobile app.
This innovative solution from UBU allows customers to add funds to their virtual wallet and receive cash back on their purchases as well as exclusive deals and discounts, providing plenty of incentive for customers to frequent their favourite eateries.
The UBU platform provides tons of benefits for restaurants coping with the COVID-19 backlash: customers can order and pay directly through the app so there is no need for restaurants to develop their own in-house app. Orders can then simply be collected when ready, meaning that restaurants can forgo the cost of using a third party delivery service. For those customers who want to eat in, there is the potential to pre-order which not only cuts out the waiting time for them but will also allow restaurants to turn their now reduced number of tables more frequently.
Furthermore, restaurants will have access to a wide range of potential customers who are already part of the UBU ecosystem, so their businesses can continue to grow and hopefully flourish.
What can we do to help?
Many customers are acutely aware of the struggle facing the restaurant industry at present and may be wondering what they can do to support their favourite restaurants during these tough times.
The solution is quite simple: order your items, pay and then collect. Help your preferred restaurants keep their costs low by avoiding using third party delivery apps and instead ordering directly from the source.
Find your favourite restaurant in the UBU Marketplace, order and pay through the app, then go and collect your goodies. If we all play our part and support our local restaurants in this way, we give them a fighting chance of surviving this pandemic.