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The Spur restaurant group, which owns RocoMamas and John Dory, will cut staff salaries by a fifth and cut their work week from June as it seeks to save money amid the Covid-19 pandemic.
Sales slowed by 46.7% in March, and trade ceased on March 27, the group said, and the focus is on cost management, although it is not anticipated that the group will have to access external financing during the least the next six months.
The group granted franchisees discounts of 20% on franchise fees and 25% on marketing fees during the period from March 1 to March 15, and waived the rates for the remainder of March, said the group.
There was no negotiation for April.
Management has granted franchisees a 40% discount on franchise fees for May. Marketing fees have been discounted by 75% for the Spur, Panarottis and John Dory brands, and by 50% for the remaining brands, the statement said.
As of May 10, 155 of the 559 restaurants across the group in SA had reopened to offer delivery services, and are expected to do so soon, the group said.
“While the initial response from customers to the food delivery offering since early May has been favorable, it is too early to determine whether the current momentum will continue,” Spur said. “Competition is also expected to intensify as more national food chains for delivery services are reopened.”
Approximately 40% of the group’s overall costs, including marketing costs, are related to compensation and employees, the group said, and fees for non-executive directors will also be reduced by 20% from 1 January. June.
In Wednesday afternoon’s session, Spur’s share had dropped 3.33% to R14.50, having lost 45.49% so far in 2020.
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