Mother’s lockdown - Closing for 30 days as COVID curfew tightens screws on fast-food chains
A reported 70 per cent reduction in business has forced fast-food chain Mother’s to close its 18 stores islandwide, relieving 900 staff and 200 vendors of their jobs for the next 30 days. It takes effect Saturday.
Mother’s joined the line of major quick-service providers that have announced plans to either slash their workforce or reduce in-store hours owing to the economic downturn triggered by the COVID-19.
Restaurant Associates Limited (RAL), operators of Burger King, Popeyes, and Little Caesar’s Pizza, on Thursday revealed that it had experienced up to a 50 per cent plunge in sales at its stores as a result of the reduction of in-store hours because of curfew constraints and will cease operations at The University of the West Indies and the Norman Manley International Airport.
The Mother’s woes started with the fallout in the tourism industry and the closure of the 10 schools in which it operates as concessionaires, said Richard Foreman, its chairman. That worsened with the lockdown of most business process outsourcing sites, with the curfews proving the tipping point.
The nationwide curfew, imposed to limit movement and thus curb the spread of the novel coronavirus, was introduced before Easter and is expected to run till May 31. Businesses can operate for only eight hours – from 8 a.m. to 4 p.m. Jamaica has so far recorded 422 COVID-19 cases and eight deaths.
In addition to the 18 stores, the company will close its three retail outlets at Devon House in Kingston.
“We supply a lot of hotels with patties. Coupled with the curfew restrictions, the situation became unprofitable,” Foreman told The Gleaner yesterday evening, adding that he had no quarrel with the Government and the precautionary measures.
But the Mother’s boss said that he had lost up to 20 per cent of his breakfast business as a result of the new times and some 50 per cent of lunch and dinnertime traffic in the afternoons.
“We had a similar fall-off when the curfew time was 8 p.m.,” Foreman revealed, pointing out that he was no longer able to foot the bill to run the stores.
He argued that the safety of his staff was also critical and that he couldn’t continue to expose them to the virus.
“Social distancing became an issue for both staff and our customers,” he said.
The developments place greater pressure on the Holness administration as it walks a tightrope of public-health concerns over rising coronavirus cases while trying to kick-start a stalled economy that has shed tens of thousands of jobs and seen countless businesses shuttered.
Business tycoon John Mahfood, who recently published a full-page plea for the reopening of the economy, has commended the Government’s messaging this week in establishing a recovery task force and muscling through a nationwide works project amid tanking consumption and sagging employment.
“It’s a step in the right direction because up until a couple of weeks ago, the focus was totally on the containment of the spread of the virus, and it seemed that the Ministry of Health and Wellness officials believed it was achievable to wipe out the virus,” Mahfood told The Gleaner earlier this week.
“This realisation and initial process of opening up the economy in a structured way is a good sign.”
But that posturing has not apparently staved off job losses.
RAL’s group Chief Executive Officer Lisa Lake told The Gleaner that it tried to keep its team employed and its doors open for as long as possible.
She, however, said in a press statement yesterday that she advised staff yesterday to brace for unavoidable changes amid plunging profits during the months of March and April. Jamaica recorded its first coronavirus case on March 10.
“Our aim is to ensure the viability of the business so that we are in a position to rebound on the other side of the crisis,” Lake said, adding that the options on the table included the utilisation of paid vacation leave or taking unsalaried voluntary leave of absence.
There would be no blanket lay-offs, she said.
However, Lake did not quantify the projected job haemorrhage.
RAL has an overall workforce of approximately 1,400 spanning 27 Burger King stores, eight Popeyes outlets, and seven Little Caesar’s branches.
RAL has offered several options to staff including taking any unused vacation with pay or taking a voluntary leave of absence without pay.
Monthly paid employees will suffer pay cuts, with the executives yielding the highest percentage slice, the media statement said.
Earlier this week, fast-food giants Restaurants of Jamaica, which operates a 51-store network with the KFC and Pizza Hut brands, telegraphed its intention to lay off staff because of the cash crunch sparked by COVID-19. The scale of the lay-offs was not disclosed.
It is unclear whether the downturn will cause ROJ to pause its ambitious plan to expand its footprint by 25 per cent with $1 billion earmarked for the buildout across several parishes.