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Mon 16th Mar 2020 - Coronavirus: LA and New York on lockdown, Gerry Ford, Starbucks ‘flips’
New York and Los Angeles orders closure of bars and restaurants: The mayors of New York City and Los Angeles, the two largest cities in the United States, have ordered restaurants, theatres, bars and cinemas to close in an effort to slow the spread of the coronavirus. Any restaurant, bar or cafe selling food will only be able to do so via delivery or take-out, officials said. “The virus can spread rapidly through the close interactions New Yorkers have in restaurants, bars and places where we sit close together,” said New York City Mayor Bill de Blasio. “We have to break that cycle.” Los Angeles Mayor Eric Garcetti said Sunday night that he was also ordering gyms closed, too. Both mayors said they were not making their decisions lightly. “These places are part of the heart and soul of our city. They are part of what it means to be a New Yorker,” de Blasio said. “But our city is facing an unprecedented threat, and we must respond with a wartime mentality.” De Blasio said his order would be in effect on Tuesday at 9am. In Los Angeles the restrictions took effect at midnight on Sunday. There was no word yet on how long the businesses in New York would remain closed. Garcetti said Los Angeles businesses affected by his order must stay closed until 31 March, adding that he may extend the order. More than 50,000 restaurants in New York were expected to shutter by Tuesday morning. According to the National Restaurant Association, restaurants account for more than $51 billion in annual revenue and have more than 800,000 employees. “We will come through this, but until we do, we must make whatever sacrifices necessary to help our fellow New Yorkers,” de Blasio said. Before word of the mayor’s order came out, a New York police car was seen in the East Village neighborhood, a pillar of the city’s night life scene, telling patrons of bars and restaurants to disperse and go home. Several businesses closed up shop shortly afterward.

Starbucks flips to “to-go” model in the US and Canada: Beginning today, Starbucks is instituting a temporary move to a “to go” model for all of its locations in the US and Canada. One of the more sweeping actions taken by a major food chain, the coffee giant is looking to adhere to advice about social distancing among an exponential uptick in cases of COVID-19. The model, which find the company closing down seating in its cafe and patio areas, will be in place for at least two weeks, according to the company. Instead, Starbucks will rely on its app for ordering ahead, drive thru in certain locations, walk up counter and delivery. Locations in “high-social gathering locations” like schools and malls will temporarily be closed. Same goes for communities that have been hit with large clusters of COVID-19 cases. “As we all know, the situation with COVID-19 is extremely dynamic and we will continue to review the facts and science and make the proactive decisions necessary to protect our partners, customers and communities,” executive vice-president Rossann Williams said in a statement. “Every community’s needs are incredibly different. We want to make sure we play a constructive role by taking responsible actions, in partnership with the CDC and local public health authorities, so we can continue to do what’s right for our partners and customers.” Earlier in the week, chief executive Kevin Johnson laid out some pre-emptive plans aimed at prioritising “the health and well-being of our customers and partners while also playing a constructive role in supporting local health officials and government leaders as they work to contain the virus”.

Caffe Nero boss demands lifeline: The government should agree to a massive bailout for the High Street to offer a lifeline to cafes, restaurants and other retailers facing ruin in the coronavirus crisis, Caffe Nero founder Gerry Ford, has warned. He demanded that ministers suspend VAT payments, business rates and other taxes for companies of all sizes in the hospitality and leisure sector. He warned that large numbers of hotels, coffee shops and eateries will go to the wall with the loss of thousands of jobs in the next two months. Caffe Nero has been badly buffeted even before the worst of the crisis arrives in the UK, Ford told the Daily Mail. “We have seen a big impact already,” he said. “Sales in our outlets in airports and tourist centres have really fallen off a cliff, down between 35 and 45%. We are probably in the top 10% of the strongest operators but others will go under. This is very serious.” In a Tweet, sector investor Luke Johnson said: “After communicating with several owners of hospitality companies in last 48 hours, I predict an avalanche of redundancies and layoffs in the coming weeks – plenty planning to cut 25 to 50% of staff. Desperate.”

Time Out Group closes five food markets: Time Out has closed its five food markets around the world. The company stated: “It is only in very recent days that we have observed any change in footfall to the Time Out Markets and delays to advertising campaigns. We have however been closely monitoring events and in response to local government guidelines and in the interest of customer safety we have temporarily closed the five Time Out Markets in Lisbon and the USA and await further advice. Given the uncertainty of the situation it is not currently possible to quantify the full trading impact of COVID-19, which will be highly dependent on the duration and severity of the virus and the response by governments and consumers. The company will review its funding and ability to manage its cost base to meet the challenges of the current trading environment and will update further on 26 March 2020 with the publication of its results for the year ended 31 December 2019.”

EasyJet warns liquidity is key to survival: Due to the level of travel restrictions being imposed by governments in response to the Coronavirus pandemic and significantly reduced levels of customer demand, EasyJet has undertaken further significant cancellations. The company stated: “These actions will continue on a rolling basis for the foreseeable future and could result in the grounding of the majority of the EasyJet fleet. EasyJet will continue to operate rescue flights for short periods where we can, in order to repatriate customers. To help mitigate the impact from COVID-19 we are taking every action to remove cost and non-critical expenditure from the business at every level. Aircraft groundings will remove significant levels of variable costs. EasyJet maintains a strong balance sheet including a £1.6bn cash balance, an undrawn $500m Revolving Credit Facility, unencumbered aircraft worth in excess of £4bn and a large and valuable slot portfolio. EasyJet has no debt re-financings due until 2022 and is in ongoing discussions with liquidity providers who recognise our strength of balance sheet and business model. European aviation faces a precarious future and there is no guarantee that the European airlines, along with all the benefits it brings for people, the economy and business, will survive what could be a long-term travel freeze and the risks of a slow recovery. Whether it does or not will depend significantly on European airlines maintaining access to liquidity, including that enabled by governments across Europe. EasyJet continues to work closely with the authorities and is following the guidelines provided by the World Health Organisation and EASA to ensure the health and wellbeing of our people and customers. At this stage, given the level of continued uncertainty, it is not possible to provide financial guidance for the remainder of the FY20 financial year.” Johan Lundgren, EasyJet chief executive, said: “At EasyJet we are doing everything in our power to rise to the challenges of the Coronavirus so that we can continue to provide the benefits that aviation brings to people, the economy and business. We continue to operate rescue and repatriation flights to get people home where we can, so they can be with family and friends in these difficult times. European aviation faces a precarious future and it is clear that coordinated government backing will be required to ensure the industry survives and is able to continue to operate when the crisis is over.”

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