With further restrictions imposed on businesses as the Government fights to keep the COVID-19 figures down, the economic outlook in T&T remains daunting.
Businesses, including fast-food companies, described the initial restrictions implemented last year as crippling and now with a similar three-week and even possible additional curtailment, it means tough decisions may have to be made by the business community.
Simon Hardy, CEO Prestige Holdings Ltd (PHL), told the Business Guardian that additional closure will be “very damaging” for his company.
“It’s now complete closure whereas before we were able to operate in some channels via delivery, drive-through and take out only.
“That at least allowed for some cash flows to come in to enable the business to have a lifeblood even though we were not making any significant money. The key for us is to have that cash coming in because we are not a high margin business. We are actually a very low margin business,” Hardy explained.
PHL suffered an $18 million loss in 2020.
The company, which runs several popular fast-food chains—KFC, Pizza Hut and Subway—in addition to being the local operator of Starbucks and TGI Fridays, recorded an overall loss of $17,748,682, just one year after it recorded a profit of $35.3 million.
And, like several other entities which now find it difficult to plan for the long-term, Hardy said PHL would continue to strategise.
“We are reviewing our projections and our cash flows because the last 12 months have not been good for the business, whereas this time last year when the first set of lockdown measures were introduced we had come off from a full Christmas and Carnival. Business had a great first quarter so the tanks were fuller, but our cash reserves are far lower now than they were this time last year,” Hardy said.
He said while there were no plans to cut staff, there was concern about the financial well-being of employees.
“We are very concerned what impact it is going to have on our people,” Hardy said, adding that the company was “still reviewing all the options.”
And if the restrictions are not lifted after three weeks, Hardy said, the future may be grim even for employees.
“I imagine our ability to provide any further support to our staff is going to be significantly reduced because there will be a greater impact going forward just because we would not have the reserves to provide any support or far less support going forward,” Hardy said.
In the meantime, PHL continues to negotiate with its suppliers, bankers and landlords to reduce expenditure where possible.
“We are looking to reduce our outgoings and only focus on critical expenditure, anything that keeps the building running. If it continues, we may have to consider more drastic measures in terms of cost reduction. I don’t know what these will be at this stage,” Hardy said.
Norman Sabga-Aboud, managing director of Pizza Boys Group who echoed similar sentiments said the future of staff continued to be unsettling, generally.
“There seems to be no support, no sort of relief from Government for staff so one of our main priorities is being able to support our staff. Most of them are paycheck to paycheck and a drastic shutdown like this literally cripples them.
“We understand the importance of protecting lives but livelihoods will be adversely affected because a lot of them (staff) are just trying to make ends meet. Most companies’ hands are now tied in our sector to pay and to be able to pay employees on a weekly basis so they can meet their own needs. We are struggling to do that and that’s now our number one priority,” Sabga-Aboud said.
However, as bad as things are, his company does not intend to reduce any of its staff as he remains hopeful business will resume at some point.
“The idea now is to keep things in such a position that when the time does come to reopen people will be out and earning full salaries again,” Sabga-Aboud added.
Consider national savings
Peter George Jr, owner of Trent Restaurants Ltd, also agreed that businesses were suffering and advised that the Government dip again into the Heritage and Stabilisation Fund to help businesses and citizens survive.
“There is no question in my mind, that the time has come—the time actually has been well past—for the Government to go into our national savings which is the Heritage and Stabilisation Fund and begin direct payment to affected people in this country, the hundreds of thousands of affected individuals and the thousands of affected businesses,” George said.
He said if some intervention was not made soon, then the country’s recovery would be “very difficult and protracted.”
On his strategy to keep his businesses alive, George said he’s taking it one day at a time.
“We just don’t know. I cannot have a medium-term strategy right now because I can’t employ a strategy and then something else changes and this Government has made it very clear there is no long-term plan right now,” George added.
He said one of his main priorities was ensuring his 275 workers in his restaurants remain “alive and kicking and able to feed themselves.”
George also advised that people, including businesses, must be mindful of COVID and its detrimental effects.
“If it is more stringent roll-backs have to take place for us to get over this hurdle then we have to make the sacrifices. We will do everything we can as we have done in the last 15 months to keep staff whole as possible,” George said.
And while citizens have been criticised by Government for irresponsible behaviour which led to the spike in COVID cases, George said citizens were only partly to be blamed.
“The citizens have actually done a very good job considering we have been in a fish bowl for 15 months. Bad behaviour has been the exception not the rule. Many, many people have obeyed, have gone out to restaurants with masks and gloves on and have maintained social distancing,” George said.
He added that while the country’s official borders remained secure, border security, however, must be more efficiently and effectively addressed.