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Morning Briefing for pub, restaurant and food wervice operators

Wed 23rd Sep 2020 - Sector urges government to take drastic action as quarter of businesses fear failure in next three months
Trade bodies urge government to take drastic action as quarter of businesses fear failure in next three months without further support: Trade bodies UKHospitality, the British Beer & Pub Association (BBPA) and the British Institute of Innkeeping (BII) have urged the government to take drastic action as they unveiled findings showing almost a quarter (23%) of their members think their businesses will fail by the end of the year without further support. The findings, from a survey of members of all three trade associations conducted by CGA, revealed the high level of concern about the future of the pub and wider hospitality sector. This was before the latest restrictions for the sector were announced by prime minister Boris Johnson this week, including a 10pm curfew and table service only, which the trade bodies said would only make the situation worse. The survey also found one in eight hospitality staff have already been made redundant, and more sector jobs are expected to be permanently lost when the government’s furlough scheme comes to an end in October. On average, businesses believe their workforce will be 25% lower by February 2021 compared with February this year – a decline of 675,000 jobs. Only 7% of respondents said they were feeling optimistic about the prospects of the hospitality sector over the next 12 months, down from 23% in August and 19% in July. As a result the trade bodies have urged the government to immediately put in place a new sector-specific employment support package and to extend the VAT cut and business rates holiday through 2021 for the sector. UKHospitality chief executive Kate Nicholls said: “The future of the sector is still very much in the balance. Many venues have still have not reopened and those that have are operating at reduced capacity and a fraction of normal revenue. The additional restrictions announced this week place even further burdens on a sector that is operating with razor-thin margins and needs all the help it can get. It is vital that these restrictions are reviewed regularly.” BBPA chief executive Emma McClarkin added: “Only by taking action can the government save our pubs, hospitality businesses and as many as 540,000 jobs. If the government doesn't act now it would be unforgiveable.” BII chief executive Steven Alton said: “Government support in our sector is an investment that will deliver strong returns economically, with skilled jobs and allowing our venues to continue to be at the centres of their communities across the UK.” Sunak has said he will update parliament on Thursday (24 September) on the government's plans to “continue protecting jobs through the winter”.  

Deliveroo and restaurant partners demand additional support from government: Deliveroo and major restaurants partners have written to the chancellor to demand extra support following the imposition of further restrictions. Businesses chiefs from Itsu, KFC, Pizza Hut, Zia Lucia, The Athenian, Cocotte and Wingstop have signed the letter urging the chancellor to introduce a support package to ensure hospitality staff incomes remain stable; extend the VAT reduction on food for six months; and extending the business rates relief for a longer period. Deliveroo founder and chief executive Will Shu said: “The government has taken many welcome steps throughout the pandemic to support the restaurant sector. However, these new restrictions pose a great threat to the recovery of the sector in the months ahead. We urge the government to consider our proposals, which would provide much-needed relief to the industry.” A section of the letter reads: “Many restaurants are only just beginning to recover from the initial national lock-down and further long-term restrictions on their operations could have a catastrophic impact on their businesses, in turn, hurting high streets and local communities across the UK. Given the detrimental impact that the requirement to close at 10pm for dine-in and collections services (though not delivery) will have on many restaurants and their staff we believe it is important the government considers further financial measures to support the sector over the coming months.”  

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