08 May WE NEED TO BE HEARD – COVID 19
We need to be heard – COVID19
The British hospitality industry, which accounts for 35% of all employment in the UK, must make noise if it is to receive the help it needs.
We are currently seeing some restaurant chains reopening to offer takeaways – most chains are opening only 3-4 locations. My experience in the industry tells me that they will lose money by doing this. However, it is a move that is worth the loss for them, as reopening will serve an important marketing purpose – they will keep their brand name in the public consciousness.
Unfortunately, this puts even more pressure on individually-owned restaurants, that would like to follow the example of chains, but cannot afford to do so. Most restaurants do not have the centralised kitchens that chains benefit from.
This, added to a much more limited budget, means opening would kill their business and endanger staff.
A forecast I have prepared for one of my clients is telling. Based on the assumption that his revenue will be 50% of what it was before the crisis, he would lose 4 times as much money by opening, than he is losing while staying closed. 4 times! This is a particularly stark result because the owner in question does not have any outstanding loans or other debt; this was a very profitable business prior to COVID 19.
Unfortunately, I also have to point out that this is the best-case scenario! With social distancing still in full swing, customers might not be eager to hurry back to restaurants, cafes and pubs – they might be
B) in the vulnerable category;
C) financially unable to since many people have not received their wages but still have bills to pay.
I do not think I need to state what restaurant losses would look like if potential earnings were limited to 30%.
And this is the outlook for healthy businesses. There are plenty of businesses out there that do not know how to reduce costs to near zero, or who understand how to access the help that has been made available to them.
And yet, the worst is still to come. Business owners, people who have saved themselves from the virus itself, may begin to experience serious levels of stress and anxiety. Many will wonder how they can survive.
We need to stand united in this fight.
I am writing to the government and I am updating journalists on the situation we are facing. I hope that the government will recognise the seriousness of the problem, and suspend VAT and other taxes until we have defeated the virus, or continuing issuing further grants. Another important thing to keep in mind is that deferring payments for owners in our industry does not help much – unless they can spread the cost over the next few years. We are talking about an industry where margins are already small.
Here is some more food for thought: by opening restaurants while social distancing is still in place, do we, in fact risk killing the hospitality trade entirely?
Why do your customers come to your restaurant? Is it just to eat quietly, keeping interactions to a minimum while worrying about whether or not being out will make them sick? Or do they go out to enjoy themselves and forget their worries?