Fast food CEO: economic impact from coronavirus is "huge"

Nando’s PERi-PERi North America CEO John Fisher joins Yahoo Finance’s Seana Smith to discuss how the fast food chain is performing amid the coronavirus outbreak and the steps it is taking to support hospital workers with free meals.

Video Transcript

SEANA SMITH: Restaurants across the country are preparing to reopen their doors as more states scale back their coronavirus restrictions. So for more on how businesses and restaurants specifically are navigating this uncertain time and dealing with the fallout from the coronavirus, we have John Fisher, Nando's PERi-PERi North America CEO.

And John, thanks for taking the time to join the show this afternoon. I want to start with Nando's global presence. You have 1,200 locations worldwide, 30 here in the US. What's the state of your business at this point?

JOHN FISHER: Seana, it's exciting. Around the world, many Nando's locations had to close in South Africa, in the UK. Australia is still open. We have over 300 restaurants there. In the US, we have almost 42 restaurants, and 39 of those are open and ready and flame grilling PERi-PERi chicken as we speak, ready to deliver.

So it's exciting. You know, we're still grilling. We're ready to go. We're looking forward. You know, I listened to your segment with Ed. We are looking forward to dine-in opening across the US and ultimately across the Nando's world.

SEANA SMITH: I like your positive outlook here, saying that it's an exciting time right now. What has the economic impact been like for your company, since you have had to scale back your services over the last six weeks?

JOHN FISHER: It's huge. It's-- as you probably know, in the restaurant business, we make money in the last 20% of sales. So we started five weeks ago when we dropped to about 40% of what we ordinarily do. We've climbed back up every week about 10%. We're almost at 60% of our regular revenue. So we're still in a loss making mode in the short term.

But we think about it a little bit differently at Nando's. It's the long term play, especially in the US, where we're just building. And we have an opportunity through this crisis, not only to expand our business through delivery and take-out, but we're doing this fascinating community service project, where we've donated over 70,000 meals to health care workers and unemployed hospitality workers.

And that's just great for our brand. It's great for our people. It keeps our flames hot. It keeps our chicken suppliers, you know, in the game so that when dining opens, we're going to be ready.

SEANA SMITH: Hey, John, have you had-- that's great that you're doing all that, and I know so many of those people are so grateful for your generosity, your company's generosity over the last several weeks. I want to drill now into supply. You mentioned that. Have you been having any problems getting your meat recently, getting the chicken?

JOHN FISHER: You know, chicken, no. We are lucky that we work with a couple of really good suppliers. And as you noted, their volumes are way off because of other restaurant companies in grocery. But we've been, with the exception of, like, Mother's Day was-- it shocked us. Mother's Day, we did about 30% more than we had expected. And we got close on Mother's Day. But on Monday, we did special hot shot deliveries, and so we stayed good.

What's interesting is it's the things you don't think about, you know, our nuts supplier. We have this really unique PERi-PERi dusted nuts that we had a little issue there with French fries. But I think most of those were a function of the fluctuation of our own volume. Some days were-- you know, we're doing thousands of dollars more than we'd expected. And so it puts real pressure on Cisco.

Cisco has been unbelievable. They're our broad line distributor, and they've been fantastic. It hasn't been easy, but we-- our basic chicken, chips, and our proprietary items, we've been in pretty good shape. It hasn't-- you know, it's lumpy, but we haven't run out.

SEANA SMITH: Yeah, that's interesting because we've been hearing kind of conflicting reports out there, just in terms of people being able to get their supply. John, real quick, I wanted to ask you about PPP. Now I know your company applied for the Paycheck Protection Program in the first round, didn't get it, and actually decided not to reapply. Can you walk me through that decision?

JOHN FISHER: Yeah, that was a tough one. You know, our first objective through this whole crisis was to keep the family together, to keep our Nandocas coming to the restaurant, working, giving them purpose. But that's expensive, as we talked about earlier. And so the PPP made a ton of sense. It was going to be government help to keep those people on our payroll, which we did.

But when the second round finally came out, you know, you read about all the different issues that some public companies were having. And we, quite frankly-- the rules changed in that second tranche. And the risk associated-- when people start changing the rules on a loan, we decided to forego it.

And we're going to hang in there and keep our people employed and engaged. Because we can see the end. You know, I think that by the middle of June, we're going to be open for dine-in, and we'll be closer to breakeven. So we can see an end.

SEANA SMITH: OK.

JOHN FISHER: So we chose to just stay out of it.

SEANA SMITH: All right, John Fisher, we have to leave it there. But I like what you said at the start of the segment here, that it's an exciting time, and you have a lot to look forward to here over the next couple of weeks. So John Fisher, Nando's PERi-PERi North America CEO, thanks so much for taking the time.

JOHN FISHER: Thanks, Seana.