By Moffin Njoroge
The announcement of lockdown by President Uhuru Kenyatta in 5 counties came as a surprise to the hospitality industry which had just started to see growth in their sales. The indefinite lockdown which was announced on March 26 affected the counties of Nairobi, Kiambu, Kajiado, Machakos and Nakuru, bundling them as a one zoned region without movement in or out of the 5 countries. Residents of the 5 counties can however move freely in the zoned region.
The president further lowered the night-time curfew in the regions to 8:00 PM. The new directive came as a shock to many businesses with some sending a majority of their staff on unpaid leave just hours after the announcement. The hardest hit businesses in the 5 counties were restaurants and hotels with the directive declaring that all restaurants should cease the sale of alcohol and stop all in-sitting serving of clients focusing on food deliveries only.
The move caught many off-guard as they were preparing for the Easter festivities in a bid to increase sales and make some recoveries. This left many outlets with stock they cannot move most of which are perishables. A ripple effect has also cascaded to the suppliers most of which are small scale farmers with a lot produce but no market.
We got a copy of an email sent to Artcaffe staff on April 15 asking consent for a 30% percent pay cut due to the loss of revenue that has gone up to 90%. The email further indicates that the staff got a 50% pay cut during the first lockdown.
Smaller restaurants and food joints have also borne the brunt of the lockdowns. We talked to Osumo Brad the proprietor of a popular fish, The Big fish located at Roosters in Garden Estate along Thika Road. For him, the 2 lockdowns have been some of the most challenging times for his business. With many people losing their jobs and others getting pay cuts, his sales have drastically declined as the spending power of his regular clients has gone down. This has weakened his financial ability to sustain his business. Brad’s major concern was his workers who are casual labourers paid at the end of each day. His initial thought was to rotate the staff but after consultations, they agreed to have pay cuts so that at least everyone got to take home some money at the end of the day. The Big Fish had been relying on food deliveries and online marketing on Twitter to stay afloat.
Getting stock has been a major problem for him. With restaurants started closing down and the decline in sales, most fishermen stopped fishing since there was no market for their produce. As Brad explains, he sources his products from small scale fishermen who have no means of storing the perishable fish when there are no buyers leading to wastage and a loss of income. As we spoke, he was explaining the predicament he is facing since in sitting was reintroduced, but he had no stock for the day.
We spoke to Leonard Mudachi the managing director Interstrat Ltd – Big Square and the chairman of Retail Traders Association of Kenya (RETRAK). RETRAK is an association of Kenya’s retailers covering restaurants, supermarkets, and other retailers. Mr. Mudachi laments the onset of the lockdown due to the low number of sales and the situation forcing some of RETRAK’s members to cut salaries, send some staff on unpaid leave while others have already started closing. The ripple effect of the low sales volumes has been felt across the industry not only by owners and shareholders but also staff and everyone else involved in the supply chain. The recently announced lockdown also came with no tax incentives as was the case with the first one. The tax incentives accompanied by rent discount on premises enabled the restaurateurs to stay afloat during the first lockdown despite low sales volumes. He further argues that the government seems to be punishing these businesses despite them using extra money to strictly adhere to the Ministry of Health and WHO guidelines on sanitation and social distancing.
Worryingly so was the laid off staff who have been stuck in the 5 counties and can’t go back to their rural homes hence have to find ways to pay rent and sustain themselves and their families despite having no source of income. The severity of the situation is evident on social media platforms with many hospitality workers who have lost their jobs asking for help. People like Kenneth Mukalo who tweeted on 9th April requesting assistance or a job offer since the landlord was kicking him out due to rent arrears. A look at his twitter handle shows the desperation and cries for help going back as far as June 2020. It is a situation that is not unique to Kenneth alone but one that many people in Nairobi formerly working in the hospitality industry must live through.
Data from KETRAC further shows the measures taken by other restaurants and retailers to mitigate the effects of the COVID-19 closures and stay afloat. Java House has had 550 reported redundancies with the rest on 50% pay cut, Art Caffe had 22 with most of the remaining staff on unpaid leave while Interstrat (Big Square) had 75. KFC on the other hand has not had any redundancies but had its employees on unpaid leave. The lifting of the in-sitting ban in premises on May 1 will come as a relief to some of the work force as many restaurants had been looking at releasing some staff if the lockdown persists in May.
Growth in the industry has also significantly reduced. Java House has had to put 3 new stores on hold while Interstrat (Big Square) has put 2 on hold. Art Caffe had also outsourced food delivery services to ensure their products reach the clients.
Mobility winners and Losers
With the ban of in house sitting of guests, client traffic has drastically reduced on these premises. This has led to an increase in traffic in other outdoor and recreational sites such as game parks, safari walks, nature trails, picnic sites and game reserves. This tweet is one of the many mentions of outdoor places around Nairobi, Kiambu and Kajiado mentioning Ngong Hills, Karura Forest, Evergreen and Paradise Lost among other outdoor venues.
A look at mobility data in Nairobi and Kenya in general in retail and recreational areas took a dip between the months of March 2020 to May 2020 but had been steadily rising till the onset of the second lockdown.
Fast Food Trends During the Lockdown
Since the onset of COVID-19 restrictions, there has been an emphasis on takeout of fast foods from both major outlets and local food joints commonly referred to as vibandas. A look at mentions of the word Kibanda on Twitter shows a spike in the Months of March 2020 which was when President Kenyatta announced a lockdown and ban on all inland travel to the counties of Nairobi, Kiambu, Kajiado, Nakuru and Machakos.
There was also a surge in the mentions of the words: burgers or fries or chips in the months of April, September and October 2020.
The reopening of restaurants, bars and in sitting services to clients seems to have brought a glimmer of hope albeit a small one to the hospitality industry. With countries in Europe easing lockdown measures and starts opening its borders to vaccinated visitors, many are still apprehensive after the Indian variant of Covid-19 flared up, paralysing the health system since early April. The Ministry of health is almost running out of vaccines with many who had gotten the first jab having to delay getting the second vaccine shot, and with India not exporting any vaccines, it remains a mystery when the second doses will be administered.
A tweet by Dr. Mercy Korir says that medics in Kisumu have reported increased cases after the Indian variant was discovered in the county. She further adds that Ministry of Health officials are predicting that Kenya will experience a fourth wave in June. As has been the case with previous waves, they have all come with some kind of lockdown and restriction of movement. The big question remains, if and when the fourth wave hits us, will the hospitality industry already on its knees survive?