Famous Brands – owner of some of South Africa’s biggest fast food and restaurant brands – says that it has already seen a decline in its food business because of new coronavirus restrictions in place around gatherings and alcohol sales.
However, it has also noted a surge in food deliveries, and is boosting that side of its business to keep up with demand.
In a statement to shareholders on Monday (23 March), the group warned that the restriction put in place by president Cyril Ramaphosa earlier in the month (18 March) has already had a “concerning” impact on its franchises – especially in the evening dining segment.
The legislation specifies that all bars, restaurants and shebeens which serve alcohol must either refrain from serving alcohol from 18h00, or close between 18h00 and 09h00 the following day.
Furthermore, such establishments are not permitted to host more than 50 people at the same time.
Commencing 1 March 2020 in the UK and 16 March 2020 in SA, Famous Brands said there has been a notable slow down in store sales activity.
“Initial indications are that sales have deteriorated steadily over the first three weeks of March as government measures take effect on restricting consumer activity. Those markets in which the virus has been prevalent for longer have been most affected, including England, Ireland and the UAE.
“At this point, there has also been a concerning decline in sales in SA with some temporary restaurant closures locally, as well as in Mauritius and Kenya, due to the decline in trading volumes in those specific markets,” it said.
Delivery services surging
However, on the other side of these restrictions, with more people staying at home, the number of online orders and home deliveries has increased.
“In light of this legislation and the general impact of the virus on customer behaviour which has seen reduced footfall in shopping centres and restaurants generally, we anticipate that our online and delivery offering will experience higher than traditional levels of usage, and accordingly, measures have been put in place to upweight our capacity in that regard,” the group said.
With regard to intensified hygiene protocols, the group has also implemented a policy of no-contact delivery for orders paid online, in terms of which our delivery drivers will maintain a practical distance when delivering orders and limit any physical contact with customers.
“Our third-party delivery partners have committed to the same protocols,” it said.
Other companies are also taking advantage of the opportunity in home deliveries.
Online florist, NetFlorist, has expanded its product range to include next day delivery for fresh fruit and produce, with prepared meals also in the pipeline. The service is currently only available in selected areas in Johannesburg North and Pretoria, but is marketing itself as an alternative to heading to the shops.
Retail groups like Shoprite, Pick n Pay and Woolworths have also reported upticks in their delivery platforms.
Food delivery services like Uber Eats and Mr D Food are also working throughout the crisis, offering free delivery times for customers stuck at home, as well as no-contact delivery process to apply social distancing norms wherever possible.