BUSINESS NEWS - With headline inflation rising to 4% year-on-year in April, up from 3.1% in March, South Africans are once again feeling the pressure of increasing living costs. 

According to Statistics South Africa, the Consumer Price Index (CPI) increased by 1.1% month-on-month, driven primarily by higher fuel prices, while the South African Reserve Bank has reinforced inflationary concerns through an increase in the policy rate to 7%.

Rising inflation adds further pressure to South Africa’s restaurant industry

Looking more closely at South Africa’s restaurant and food sector, however, the latest figures reveal a broader challenge than inflation alone. Although food inflation eased to 2.9% in April, rising fuel, transport, electricity and service costs continue to place pressure on disposable income. 

Restaurant and accommodation services rose by 5.2% year-on-year, while catering services and restaurants increased by 4.6%.

The result is an industry caught between increasingly cost-conscious consumers and rising operating expenses.

Restaurants face growing pressure from changing consumer behaviour

For award-winning chef, restaurateur and culinary school owner Kayla-Ann Osborn, the current challenges facing South Africa’s restaurant industry are far from theoretical.

As the owner of two KwaZulu-Natal South Coast restaurants and a culinary school, Osborn says she has experienced the impact of rising costs, quieter trading periods and increasingly cautious customer spending over the past six months.

“In the restaurant industry, breakeven doesn’t drop significantly when it’s quiet,” says Osborn. “It’s not as proportional as other businesses, so when turnover drops, the pressure is real.”

For Osborn, navigating the current climate is not about finding one quick solution, but rather making practical and disciplined decisions throughout the business. 

These include trading smarter, costing menus carefully, using ingredients more creatively, producing more in-house, protecting money for future growth, creating entrepreneurial opportunities, developing local food artisans and investing in well-trained staff capable of delivering stronger guest experiences.

Smarter trading and tighter menus may become essential for survival

According to Osborn, the first shift for restaurants is becoming more strategic about when they trade, what they offer and how each menu item contributes to profitability.

Being open seven days a week may appear to increase turnover, but if slower trading days cost more in overheads than they generate in sales, operators may need to reassess their business models.

“It can be more financially beneficial to increase covers by 15% on a Friday night than to run at 80% occupancy with an ineffectively costed special on a Tuesday,” says Osborn.

For some restaurants, survival may increasingly depend on tighter menus, stronger costing structures, greater focus on profitable trading periods and additional revenue streams, such as home-cooked offerings or heat-and-eat products.

Local sourcing and in-house production can reduce costs and create value

That same discipline should extend to menu development itself.

Farm-to-table cooking is not only about provenance, says Osborn. She believes it is also a practical approach to managing costs, reducing waste and creating greater value from every product purchased.

By focusing on seasonal local produce and adopting whole-product utilisation — from nose-to-tail cooking to root-to-vegetable approaches — restaurants can create menus that are sustainable, distinctive and financially efficient.

For Osborn, this philosophy extends beyond sourcing to what restaurants can produce themselves.

In-house production and home-grown ingredients, from handmade pasta to mushrooms cultivated in her own garden, can reduce dependence on external suppliers, lower costs and create a more distinctive offering.

Rather than compromising quality, Osborn believes restaurants can strengthen their identity by taking ownership of the ingredients and products that differentiate them.

Skills development and entrepreneurship could strengthen local food industries

Beyond kitchen operations, Osborn believes restaurateurs need to remain focused on long-term growth and sustainability.

Budgeting, traditionally viewed as a back-office function, should become an essential management tool to understand break-even points and navigate quieter trading periods. She also advises restaurant owners to preserve capital for future growth and make decisions using a medium- to long-term perspective.

Difficult economic conditions may also create opportunities for entrepreneurship, particularly where restaurants remain reliant on imported speciality products.

Many artisanal products, including cheese, cured meats, chocolate, bread and speciality ingredients, are sourced internationally or from outside local regions. Osborn believes there is considerable potential to develop artisanal expertise locally in South Africa.

She is a strong advocate for skills development and job creation and believes the market has room for high-quality local alternatives to costly imported products.

Building future talent through practical industry training

This is where Osborn’s industry-based culinary school forms part of the broader solution.

Through practical training conducted within her own restaurants, students are exposed to the pace, standards and realities of the hospitality industry while developing skills that can lead to employment or entrepreneurial opportunities.

The school's programmes include artisan-focused training in areas such as cheese making, chocolatiering, baking, sourdough and gelato production, helping to build local expertise capable of supporting restaurants, strengthening regional supply chains and contributing to South Africa’s broader food economy.

Customer experience remains a critical factor

For Osborn, the final piece of the puzzle is the guest experience.

As consumers dine out less frequently, every interaction becomes increasingly important.

“Well-trained and well-presented staff come across as in control and can guide the experience,” says Osborn. “This gives guests confidence in the experience and creates trust, allowing for open communication around recommendations, opportunities for upselling and feedback.”

Through front-of-house training programmes, including bar service, table attendance and hospitality skills development, Osborn’s school also supports restaurants in strengthening service standards, protecting brand reputation and encouraging repeat business.

For Osborn, the message to restaurateurs is clear: “Vasbyt” - but do so with intention.

In a tougher economy, she believes the businesses that will endure are those that trade smarter, waste less, train better, support local producers and create value that keeps customers returning.

By approaching business through the lens of minimal waste, sustainability, job creation and exceptional customer experience, Osborn believes South Africa’s restaurant industry can transform economic pressure into opportunity through innovation, entrepreneurship and local production.

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