Restaurant Industry Booming in South Africa

By Nicolette Chinomona    25-Jun-2013 12:03 UTC+02:00

With the economy in the state that it is in, people are tightening their belts ad spending less and you’d expect fine dining establishments to suffer. Why is the restaurant business thriving when a lot of other industries seem to be stuttering along?

All South Africans and in fact Africans love good food! Where there are people gathered together, whether to celebrate or to mourn, there’s always food, I would even venture to say that the presence of food draws people. But with so many choices on the market today, what is it that really makes any restaurant rise above the rest? Especially in this economy, where inflation is on the rise, driving food prices up and thereby the bills at fancier places.

I sat down recently with Noble Magutshwa, a seven year veteran of the restaurant business, who is currently the manager of Senza, to get a feel from him about how the restaurant business is doing in South Africa. Senza is a relatively new restaurant in Petervale. And for a business that is just over three months old, it already boasts an impressive clientele that includes celebrities, ministers and even people who work in the president’s office.

Naturally the restaurant business is extremely competitive, and the birth and death rates of restaurants are incredible- because customers are very particular about their palatial choices, the food we eat is not necessarily a need, but a desire for more than just food- for the experience, for the service and most importantly for the quality. So with higher costs and lower budgets in the average home, why are restaurants doing so well? I got a clue while speaking to Noble, this is what he had to say:

Nicolette: Noble, how is the restaurant business doing in South Africa, given the economic conditions we are in?

Noble: It is excelling, considering that South Africa is one of the fastest growing economies in Africa, it’s becoming very developed and that’s influencing lifestyle and culture. Everyone wants to sample a westernized way of life and that includes eating out, so the industry is doing great. There are tons of restaurants opening up.

Nicolette: Well the restaurant industry is notorious for closing down. Lots of times new restaurants pop up and then die.

Noble: Well it balances itself out, as some close and some open.

Nicolette: What about staying power?

Noble: Well the strength of a restaurant is in its cuisine, quality of service and food, because the quality determines what kind of clientele you get.

Nicolette: Is it really the cuisine, because looking at the principles of business- anyone can make a better burger than MacDonalds, but not everyone is MacDonalds- there are other things that play into it, there’s so much competition, because culinary schools are pumping out chefs. Is it really the food?

Noble: It’s sort of like the music industry- because of technology, there is a lot of access to more resources, to learn how to cook, and people are gaining more experience faster. But again it has a lot to do with passion- passion for cuisine and passion for business.

Nicolette: So how do you handle the challenges you face in the restaurant business, considering that- granted your food is great and the service is great, but at the end of the day, your suppliers are affected by the economy, their prices go up and so do yours.

Noble: It comes back to the quality of the services, even if we have to lift our prices, because service, you can get anywhere- but quality service is something that is rare. When people get the best quality services they’ll keep coming back and they will be willing to pay the price. Often it’s not even about the price, it’s about the prestige, about being able to tell people they ate at Senza. We pride ourselves not just on the food, but on the service! I once went to a restaurant where they didn’t tell me that their dessert had eggs in it and you only find out afterwards when you react to it.

Nicolette: And you do that here? Your staff tells people what is in the food?

Noble: Yes. It should be incorporated into the menu. If you order a grilled steak you should be told whether it is grilled over a flame, flat-top, or a pit.

Nicolette: Well I guess I am a bit of an infidel in that case then, because I’ve never really wondered what my steak is grilled on. So how is your new baby (restaurant) doing?

Noble: Well the baby has been doing quite well, we have our ups and downs, but we’re rocking- a lot of people in this Sandton and Four Ways area are talking about Senza, it’s the place to be, we have the craziest nights and right now we’re fully booked for weekends up until September. Our underground cocktail bar is where all the action happens.

Nicolette: It should be, I’ve been down there and it looks really cool.

Noble: We’ve done well, our turnover is good.

Nicolette: Is that the normal experience for people going into the restaurant business?

Noble: It’s unpredictable most of the time.

Nicolette: So apart from the quality what’s great about this place? I love the décor.

Noble: It’s the décor, it’s the presentation.

Nicolette: Yes and I like the fact that your staff is very friendly, I walked in and someone smiled at me, unlike some places where it’s like you’re punishing the staff by eating there.

Noble: Well we try our best to make sure that our staff have a lot of knowledge about whatever it is that you want, whether it’s a wine or brandy- especially the bar because it’s the most enticing part of a restaurant. If we delay with a meal, we can offer them a round of drinks from the bar while they wait. It’s very vital and plays a pivotal role.

Nicolette: So what kind of people do you attract?

Noble: We are an upmarket restaurant, so our target market is corporate people- executives, we’ve had a couple of ministers coming around, some people from the president’s office, some journalists and actors.

Nicolette: Ok, now this is how I judge a restaurant- I love food, I love being with friends and so I basically want to eat at a place where I can sit for hours with my friends and laugh and talk over good food- can I do that here?

Noble: Exactly, we are a fine dining establishment, so when you come here, we don’t expect you to leave immediately. You can have your starter, drink your wine, when you’re ready, you let us know when you want to do your main meal and we’ll do it.

Nicolette: So you let the customer pace themselves out?

Noble: Exactly, we don’t want to rush you, or make you feel like you’re in a coffee shop. This is a fine dining experience, so we have to have time for you.

That last phrase above is what I believe is a value that will make any business, whether it is a restaurant or not, successful- it is as simple as making time for clients. Making time to know them, know their wants and then delivering it to them in a classy manner. And like Noble, I believe that customers will be willing to pay a premium price for good service. The restaurant industry is a major employer in the country, but is also very volatile- customers have an infinite selection of choices and are well acquainted with what they want- unlike a lot of other industries, where businesses will supply a given product and the customer has no choice, but to select from what is available- and in a lot of cases, can’t even really tell you what it is that they want.

The restaurant industry is growing by shifting focus away from pushing customers to buy, to making customers so comfortable that they don’t want to be anywhere else- except right where they are. Building and creating environments that inspire comfort. A lot of business models pay so much attention to a product that they miss out on building a phenomenal experience when delivering the product. Businesses would do well to learn from the restaurateurs how to stick out in a heavily crowded market.

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