While international borders remain closed, the reopening of local businesses in Stellenbosch, under level 2 lockdown, will rely largely on the local market for business.
But according to Cobus Venter, macro and ad hoc research manager from the Bureau for Economic Research in Stellenbosch, the local market is too small to cater to the expanded supply due to a reduction in tourism and in the number of students in town.
“Many of our local businesses [in Stellenbosch], that were forced to close during the initial phases of the national lockdown, have started reopening and [the municipality] welcome this as these businesses employ many of our residents,” says Stuart Grobbelaar, communications manager at Stellenbosch Municipality. PHOTO: Facebook/Stellenbosch Municipality
“In the absence of the large inflows of people, [businesses] will not be able to sustain themselves over the medium term,” Venter said.
It is unlikely that Stellenbosch would have anything close to a normal season even without restrictions, said Venter.
“The loss of incomes and fear of Covid will still constrain demand,” he said. One can expect that this immediate shock of Covid-19 would last for the remainder of the year and well into next year, Venter said.
It is ‘beyond tough’
For local restaurant Basic Bistro any set back could cause the business to close down, if tourism and students do not return back to a relative normal at this stage, said Rico Wessels, manager and chef at the restaurant.
“…With no tourists, limited school gatherings and almost no students in town, [there] has been terribly low sales,” Wessels said.
According to manager and chef at Basic Bistro, Rico Wessels, the local business is “merely scraping by”. PHOTO: Facebook/Basic Bistro
According to Wessels, since the implementation of level 2, Basic Bistro was doing “better but not great”.
At present, Basic Bistro is running at 50% of the type of turnovers the business had seen this time last year, he said.
“During level 5, [Basic Bistro] was doing only about 15% of the same time last year. Level 3 to 4 saw it climbing to about 35%,” Wessels said.
It was “beyond tough” to keep business going during the initial stages of the lockdown, he said.
Scraping by to survive
The local restaurant, that is “merely scraping by”, is still running dangerously low to the zero-profit tipping point, Wessels said.
“[There were] pay cuts to all staff [and] financial relief from customers, and friends pulled us through together with credit facilities,” said Wessels. “If it was not for this, we would definitely be closed today.”
For the local guest house, Bonne Esperance, although the business saw a 10% increase in occupancy from level 5 to level 2 lockdown, the slow increase in bookings was “still not enough to cover costs”, said Annemien Kotze, owner of Bonne Esperance.
Owner of Bonne Esperance, Annemien Kotze, is hoping that locals supporting local businesses will pull businesses out of this difficult season. PHOTO: Facebook/Bonne Esperance
Occupancy at Bonne Esperance for the month of August was at 15%, comparative to the average of 77% for August of previous years, said Kotze.
During the initial stages of the lockdown, the guest lodge temporarily laid-off staff and applied for an interest-free loan from the South African Future Trust to support their employees, she said.
Both businesses also claimed from government’s Temporary Employee/Employer Relief Scheme to support their staff.