Restaurants, eateries and **tels in the country have been forced to re-think their plans after new government directives threw plans to capitalize on the long Easter weekend **liday into disarray.
As revealed by Big Square CEO Lawrence Mudachi w** is also the Chair of the Retail Traders ***ociation, the effects of President Uhuru’s address on Friday, March 26 immediately sent ripples through the sector.
He stated that **tels and restaurants faced collapse over the implications of the directives; which include a ban on in-**use dining with only delivery and take-away orders allowed, further reduction of operating **urs and suspension of alco**l sales.
The Big Square fast food chain, for instance, with 10 of its branches in the one-zoned area is expected to suffer a big revenue hit.
Mudachi noted that unlike in the first lockdown in 2020 when tax relief measures were also introduced, loans restructured and some la***ords slashed rents, the most recent pronouncements came at a time when all taxes and operating expenses including rents were back to normal.
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He stated that wage cuts and business closures would be inevitable for many in the sector w** picked lessons from the first wave last year when they adopted a ‘wait and see’ approach.
“Majority of la***ords from December have gone back to normal…so we are st*** at full rent…Let’s not forget there were some minor tax benefits which are no longer in place. We are planning for statutory deductions; NHIF, NSSF, for us in the industry training levy and then VAT, PAYE and we’re preparing for all of it. I have to point out that the restaurant business is no different from any businesses.
“Everyone was looking for***d to cash in on Easter so we w*** meet a crunch,” he noted.
He noted that recovery plans for **tels and restaurants were no longer feasible as they had to rethink their operations to be able to meet their obligations.
“We w*** meet a crunch and we are going to suffer greatly but our biggest concern is w*** we be there to trade? W*** we survive? That is the elephant in the room,” he noted.
To adapt, he noted that restaurants had to ramp up their delivery and take-out businesses alt**ugh it was not guaranteed to be enough.
He highlighted that in response to the ********, Big Square grew delivery and revenue as a share of its revenue from 16% to 35%.
Watch Mudachi discuss the challenges facing the sector in the interview below:
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