Weekly update w/c 16.11: Hospitality sector sees lockdown continue to impact revenues in the traditional boom season while concerns are raised about food supply in early 2021
With the devolved nations in various states of country-wide lockdown, restaurant and pub chain Mitchells & Butlers have announced the permanent closure of 20 sites. The company owns pub chain All Bar One as well as Toby Carvery and Harvester restaurants and, despite seeing a sales boost in August during the Eat Out To Help Out scheme, blames the pandemic for the closure. July sales were down 32.4% year-on-year and fears of a second wave of infections has seen sales fall again (down 6.4% in the first three weeks of September year-on-year).
Job cut announcements in the restaurant sector have become a common feature of the pandemic with major chains such as Pizza Express recently announcing 1,300 losses, although Whitbread recently halved it’s September prediction of 6,000 internal job losses, citing the furlough extension and positive vaccine developments as reasons for some renewed optimism.
UKHospitality has called for greater clarity on the support that will be made available to the sector over the winter. Lockdowns and restrictions between Halloween and January will result in significant business losses for pubs and restaurants, in a year where annual turnover for the hospitality sector has fallen by 40% already. A recent survey by trade bodies the British Beer & Pub Association (BBPA), the British Institute of Innkeeping (BII) and UKHospitality has found that 72% of hospitality businesses expect to become unviable and close in 2021 depending on the level of restrictions place by the government.
Beyond the immediate concerns of the pandemic, and with the deadline for a trade agreement with the EU looming, concerns about UK food supply into the UK have been raised by the Guardian. The combination of potential border delays and limited warehouse capacity due to Covid-19 could, claims the newspaper, lead to significant food shortages after December. While a great deal of uncertainty exists around any projections made for the combined impacts of Covid-19 and future trade deals, this to some extent echos comments from within the food retail sector (Tesco, Morrisons) on food supply and prices.