Ocean Basket CEO Grace Harding: Dealing with a 58% Covid-19 collapse in sales

In this interview drawn from the latest episode of Rational Radio, Ocean Basket's CEO Grace Harding says the company's owners are in it for the long-term. She likens the current situation to one where you go wake up in the morning to a whole new world, with customers having disappeared virtually overnight. Grace has some savvy ideas for others in the restaurant business – do what you can to leverage your kitchens, but don't bank on that saving you. it's now time to batten down the hatche s. – Alec Hogg.Let's bring in Grace Harding now. She's the Chief Executive of Ocean Basket. Grace, it's lovely to have you on the program today. What David Shapiro says about people not going out to restaurants: are you seeing a similar situation?.___STEADY_PAYWALL___.Yes, definitely. I think our sales over the weekend were about 58% down and up until the other day, I was still thinking about what we're going to do to keep the trade going, to keep the customers coming in and then I woke up this morning and I thought 'well, I guess we need to get some advice from forefathers because it feels like World War 3 with different ammunition' and as a restaurant group, eating out is not a necessity like toilet paper, which has become one on the list, apparently. But we are definitely seeing a massive decline..Grace, it was interesting to read through the Famous Brands' statement. With them being listed on the stock market and having UK operations as well, they say that in the UK, it was on the 1st of March that their sales started plummeting. In South Africa, it was on the 16th of March, so it's about a 2-week gap between the two. Has the 16th also been a poor red-letter day for you? .Yes. I think the trend in everything is that South Africa is two weeks behind. We're even two weeks behind in terms of the impact of the virus ramping up, but I can say it's very, very similar..And how bad is it or how much of a difference is it from say, the 1st of March?.Night and day. You can't even compare it. It's a bit like you went to bed and things were starting to look very strange around the virus and you woke up, and the guns were outside your door. What was weird is that January and February were great months. They really were. It feels like we've been hijacked by a big, bad virus..It's an interesting point – and bringing David back in again – I spoke with Hendrik du Toit on Friday and he said that from an investment perspective, it's almost like war has been declared. He said it's like a war economy. The governments are going to have to spend as they do in wartime, without any thoughts. It was interesting to hear Grace mentioning a moment ago, that it feels like we've gone to war as well. Is that the way you're reading it? .It is. In fact, one investment man described it as WW3. He says, "But it's going to be a 90-day WW3". It's exactly like that. People have gone into hiding. Where it's different though, is that you haven't got the human spirit. We're all alone. We're all sitting by ourselves with our wives, with our families. Yes, it's bringing families together again but, in those times, even in wartimes; you could go out. You could see neighbours. There was closer communication between families, or families and friends. You could sit around and talk about things. I think this is the difference here and this is what makes it psychologically so different. It's that you walk past someone in the street and you don't want to greet them just in case they cough or splutter. You want to keep your distance and that, for me, is a very strange thing. They're closing down parks and nobody wants to run or be next to somebody else, so we're going into a totally different environment now, which is so anti-social, and understandably so..Well… anti-social, I guess, but there is social media, which would make things a bit easier. But just in the real-world Grace – in your world -, what about your staff? Presumably, you gear up for the same kind of numbers that you had in January and February. You can't just tell all your staff to go home, or can you?.We're working on a few priorities. The first is that people come first and I guess, this is when we're lucky that we're not a public company because we can make decisions that are therefore given by our shareholders and the first thing our shareholders said to us is, "Grace, the people come first. It doesn't matter what happens to our investment", which is absolutely mind-boggling and that's the way it should be in my mind, so that's the first point. The second thing is we are a franchise business. We have seen all our restaurants shut down all over the world. So, Cyprus restaurants: we actually own those. Those are the only restaurants we own. They shut down. Kazakhstan, Kuwait, Amman, Dubai, and Mauritius… so zero income coming in from them so it is all about people. Our own head-office people; we are still going to be paying their salaries. We're okay for a while. We don't know how long this war is going to take. I heard you say 90-day war. Gee whiz, from your lips to everyone's ears that it's a 90-day war. The restaurant staff is more challenging..Grace, if it is 90 days, are you guys able to see it through?.Yes we are. The restaurants are a challenge, you know. Some restaurant owners obviously, are not as frugal as others and everyone has different conditions but we started communicating with our restaurants – literally, on the 18th of March – and we're doing everything to support them. We haven't charged any royalties in marketing. In March already, we stopped it even though we had half a month of decent trade. So, we are able to do what's best for the longevity of the brand and the wellbeing of the people and then the other thing we're implementing is we're starting up our own little school. We either use the war analogy or the delay of the Olympics analogy and we know that we will run one day and we will remain fit, so we're developing a whole curriculum of things that we want people to learn from improving Excel sheets to understanding GP's, waste management, and all sorts of things. Everyone in our community is going to be encouraged to learn and then obviously, the office workers and us who have to run the business; we are really busy..Grace, what about dark kitchens? We know there has been a trend in the whole Fourth Industrial Revolution, to more convenience-foods. Can your franchisors not just change things around and start producing for the takeaway market?.Well, we already have kitchens and at the moment, they're dark so we believe that yes, some people are still doing takeaways. That's going to drop because everyone is going to be holding on to their cash. How many people already have scaled down their lifestyle? Not only middle management or blue-collar workers. I don't know what these dark kitchens are going to do because how many people are going to carry on spending X amounts per month on this luxury product? We do have restaurants. They do have kitchens. They are able to deliver. They are able to do takeaways and I don't believe that business is going dry..Alright. So, even on the restaurant side you've… No, we seem to have a problem on. Just very briefly, on the restaurant side as you say, you had a drop of 58% just in the last couple of days but on the takeaway side, there hasn't been an increase on the other end..No, I think there was a little burst to the East. We haven't got the stats from the other delivery companies, but when I get them, I'll share them with you. I'll just pop you a mail but if there has been a burst Alec, I do believe it's short-lived..Grace Harding, the Chief Executive of Ocean Basket bringing us up to date there.

Ocean Basket CEO Grace Harding: Dealing with a 58% Covid-19 collapse in sales

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