Pubs will need financial support to survive, says trade bodies
Pubs will need financial support to survive, says trade bodies

Second lockdown 'final straw' for hospitality

2 November 2020

England's second lockdown will be significantly damaging to businesses and supply chains impacted by forced closures, according to industry bodies. 

Following Prime Minister Boris Johnson's announcement on 1 November, a number of retail and hospitality sector trade bodies have warned the four-week lockdown will cause ongoing financial distress to businesses and major disruption to supply chain partners. It would also cut festive season revenues and jobs, and permanently set back the country's economic recovery. 

From Thursday 5 November all non-essential shops, leisure and entertainment venues in England will be forced to close, including pubs, bars, restaurants and retailers, with the exception of those that sell medical or food products and take-aways. Scotland, Wales and Northern Ireland are already under restrictions.

Emma McClarkin, chief executive of the British Beer & Pub Association (BBPA), said: “Make no mistake, this could be the final straw for thousands of pubs and brewers. It will also create major disruption to our supply chain partners whose businesses are now also at severe risk.”

 McClarkin added that “the same, if not greater” financial support than the first lockdown will be needed for businesses to survive, such as provision of grants for ongoing fixed costs for all pubs, and compensation grants for brewers. 

Also, the BBPA has called for more detail on the furlough extension and a “full support plan far beyond the lockdown period”, including an economic stimulus package from April 2021, extending the business rates holiday, the hospitality VAT cut, and support on beer duty. 

Closures at Christmas and the wider festive season are a significant cause for concern. According to the British Retail Consortium (BRC), the first lockdown resulted in £1.6bn per week in lost sales from non-essential shops, and it anticipates “much bigger” losses in the coming months.

Helen Dickinson, chief executive of the British Retail Consortium (BRC), said: “Retail faces a nightmare before Christmas. It will cause untold damage to the high street in the run up to Christmas, cost countless jobs, and permanently set back the recovery of the wider economy, with only a minimal effect on the transmission of the virus.”

Dickinson added the government must provide support to businesses forced to close, “otherwise the consequences for local retail will be dire”.

Kate Nicholls, chief executive at UKHospitality, said the trade body supports any “proportionate action necessary”, but highlights the need for “a clear roadmap out of lockdown and through the tiers”.

Nicholls said: “If hospitality, the sector that is our country’s third-largest employer, is to survive and help drive economic recovery, it will need equivalent – or more – support than that of the first lockdown.

“For those that have survived, viability is on a knife edge, as is the future of the tens of thousands of businesses and hundreds of thousands of jobs."

While big businesses are trying to sell-off stock that will expire in the coming weeks, such as JD Wetherspoons’ four-day event selling pints of real ale for 99p across England, smaller firms may not be so agile. 

Andrew Goodacre, CEO at the British Independent Retail Association, said: “This second lockdown could not be at a worse time for independent retailers as we approach the crucial festive period.

“Small retailers need support through this lockdown. We lost 25% of independent retailers after the last lockdown, and without meaningful support the sector will be decimated by further lockdowns.”

For some, the assurance of government support is a relief, however more information on the details is needed.

Ian Wright CBE, chief executive at Food and Drink Federation, said the extension of the Coronavirus Job Retention Scheme is “extremely welcome for food and drink businesses”, and has called for “further clarity that the food supply chain will be supported sufficiently”.

 Wright said: “The economic impacts of this decision threaten calamity unless we see further details of a rescue package in the next 72 hours.”

The Confederation of British Industry (CBI) tweeted during its 2020 Conference that CBI director-general Dame Carolyn Fairbairn said the run-up to Christmas is the most important time for many firms, and “economic damage is unavoidable, but we need to minimise it”.

Dame Fairnbairn argued “we should be challenging guidance that isn’t evidence-based”.

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