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- A Stuijt
- Retired South African medical journalist, ex-Sunday Times of Johannesburg.
Where are all those WC2010 fans going to eat?
08:41 | 
Posted by
A Stuijt |
Restaurants, bakeries closing at alarming rate, reports the Cape Argus
Soaring food-prices, the steadily-collapsing of the power grid and the emigrating white middleclass are forcing many restaurants, bakeries and butcheries in greater Cape Town to close their doors forever. Thus far this year 70+ food-preparation outlets have auctioned-off their businesses - double from last year.
July 28 2008 - The Argus in Cape Town reports that -- at a time when South Africa is gearing up for hundreds of thousands of foreign visitors to the FIFA World Cup 2010 tournaments -- scores of restaurants and bakeries across the province are shutting their doors forever due to rising food prices, increased basic wages of waiters and increased interest rates.'
The customers of these restaurants are also disappearing rapidly:
- South Africa is now haemorrhaging white middle-class families who are either cutting out 'luxuries' such as dining out, or are emigrating: these also are the very people who are the best customers at restaurants with their families and for business negotiations...
These past six months, Western Cape Auctioneers in Brackenfell, a specialist in auctioning catering equipment, has already sold the equipment of about 70 restaurants, coffee shops, bakeries and butcheries.
- If this rate continues, some 140 food-preparation outlets can be expected to close in greater Cape Town alone this year.
- Auctioneer Stef Olivier, a director of the firm, said: "The sales have included 200-seater restaurants and all kinds of food and beverage outlets, most of them in Cape Town." All last year Western Cape Auctioneers sold the equipment of 96 food and beverage outlets, compared with 72 in 2006.
Growth has shrunk to 3%...
Iraj Abedian, chief economist at Pan African Capital, said 'an economic climate in which growth had shrunk from 4% to around 3%, and interest rates had shot up from about 9.5% to 15%, was forcing consumers to cut out luxuries and focus on necessities.
- "The resulting loss of jobs and incomes has a negative effect on the economy and creates a lot of social stress," he said.
Auctioneer Olivier: "The number of food and beverage outlets that have closed this year is likely to be the highest we've had in our 10 years of operating. 'Eating out is a luxury these days when people are not spending money," he said. "Faced with higher food prices, restaurants are forced to charge more, which has only negative results."
A nail in the coffin for many restaurants was the impact of the continuous power blackouts on turnover, said Juan Engelbrecht, the owner of three Jimmy's Killer Prawns restaurants.
Many restaurants had to spend money they didn't really have on generators costing as much as R80,000 because of these Eskom power cuts. And these are expected to start up again, with Koeberg nuclear power station again offline Cape Town faces even more blackouts, Eskom officials warned this week.The 40% to 50% downturn in business in winter in the Western Cape has been worsened by the already very poor state of the SA economy -- which contributed another 20% to 30% decline in his own restaurants' trade from last year's figures, Engelbrecht said.
Mbeki forced increased wages for waiters
Amidst this worsening economic situation, pres. Thabo Mbeki's new law, forcing restaurateurs to pay higher minimum wages to their waiters, isn't helping either. Restaurateurs who closed down this year said right at this crucial 'crunch'-time' Mbeki 's latest labour law forced a minimum wge of R8.46 for waiters on them. This immediately pushed the monthly cost of doing business up by between R6,000 and R12,000 - depending on the number of staff and the hours they work.
Economist Abedian said the loss of this many jobs and family incomes as restaurants and bakeries are closing down at a fast rate now, have "all kinds of implications that cascade right through the economy".
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Famine SA
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