Pubs won't be able to fully open until May © Dave Rushen/SOPA Images/LightRocket via Getty Images
Pubs won't be able to fully open until May © Dave Rushen/SOPA Images/LightRocket via Getty Images

Hospitality supply chain 'at risk of collapsing'

23 February 2021

The hospitality sector has warned it will “grind to a halt” if the supply chain doesn't receive immediate support.

Firms in the hospitality sector have been hit hard by lockdowns, and trade body UKHospitality said the latest government announcement of a limited opening date in April would threaten the survival of firms.

Research by UKHospitality’s Supplier Alliance revealed that without immediate financial support for the supply chain, two in five businesses will be forced to close, with 20% facing insolvency and a likelihood of 324,000 redundancies in the supplier workforce.

Kate Nicholls, chief executive at UKHospitality, said: “The totality of hospitality is dependent on its supply chain. If supplier businesses fail, then the entire sector grinds to a halt and we are at risk of the whole thing collapsing. 

“We are hopeful that hospitality businesses can lead the recovery of the UK’s economy this year. That cannot happen if businesses are not supplied to do the job. The supply chain is everything and it must be supported.”

Meanwhile, in a speech to the National Farmers' Union, Labour leader Keir Starmer called on the government to use the public sector's £2.4bn spend on catering to buy more British produce to support farmers hit by weak demand from the hospitality sector.

Under the government's “four-step” roadmap outdoor hospitality and entertainment venues, like pub gardens and zoos, will be able to reopen on April 12, and indoor venues such as cinemas, sports arenas, and hotels for leisure will reopen on May 17.

Nicholls said: “This delay in reopening will make the job of survival all the more difficult for businesses only just clinging onto existence. It is much more than just an inconvenience for many employers in our sector, it is another delay that they cannot afford and, for too many, will not be able to survive.

“In the immediate term, we need a generous compensation package that goes beyond what was offered in January if we expect businesses to survive, with a commitment to eliminate new costs that are due to hit.”

Nicholls warned that once hospitality can open it will face "severe restrictions", and "outdoor-only opening initially just does not work for huge numbers of businesses".

Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Let us be clear, outdoor service at pubs is not the same as properly opening pubs both inside and outside and is not commercially viable.

“By our numbers, 29,000 pubs would still be forced to stay shut in April because they simply do not have the beer garden or outdoor space to do it.

“If pubs do open outdoors only in April – we believe just 17% of UK pub capacity will actually open. This would result in a loss of turnover to the sector of £1.5 billion when compared to trading in normal times. That is far from reopening and recovering.

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