Spur to cut staff’s salaries and work weeks from June

Restaurant group Spur, the owner of RocoMamas and John Dory’s, will cut staff salaries by a fifth and reduce its working week from June as it seeks to save cash amid the Covid-19 pandemic.

Sales slowed by 46.7% in March, with trading having ceased on the 27th of that month, the group said, and focus is on managing costs, even though it is not anticipated that the group will need to access external funding for at least the next six months.

The group granted franchisees discounts of 20% on franchise fees and 25% on marketing fees for the period March 1 to March 15, and waived fees for the remainder of March, the group said.

There was no trading for April.

Management has granted franchisees a 40% discount in franchise fees for May. Marketing fees have been discounted by 75% for the Spur, Panarottis and John Dory’s brands, and 50% for the remaining brands, the statement read.

By May 10, 155 of the 559 restaurants across the group in SA had reopened to offer delivery-only services, with more expected to do so soon, the group said.

“While the initial response from customers to the delivery food offering from the beginning of May has been favourable, it is too early to determine whether the current momentum will be sustained,” Spur said. “Competition is also expected to intensify as more national food chains reopen for delivery services.”

Approximately 40% of the group’s overhead costs, including marketing costs, are remuneration and employee related, the group said, and fees for non-executive directors will also be reduced by 20% from June 1.

In afternoon trade on Wednesday, Spur’s share had fallen 3.33% to R14.50, having lost 45.49% so far in 2020.

gernetzkyk@businesslive.co.za

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