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Morning Briefing for pub, restaurant and food wervice operators

Tue 24th Nov 2020 - Opinion Special: What if The Winchester isn’t there anymore?

What if The Winchester isn’t there anymore? By Mark Wingett

“Let’s go to the Winchester, have a nice cold pint, and wait for this all to blow over”. Ah, if only we could, this week, follow Simon Pegg’s advice in escaping a zombie apocalypse in the film Shaun Of The Dead. Of course, we would need to order a substantial meal to go with it, but how much could we do with having access to a pub’s ability to allow you to escape what is happening in the outside world, right now? I wonder if the wider public truly realises what it will miss when local pubs are no longer there. On Tuesday (24 November), the secretary of state for transport Grant Schapps was the latest minister to do the breakfast TV rounds to defend the government’s incoherent thinking. He came up with this: “It is not very enjoyable but possible to go about your life without visiting the pub.” How enjoyable is it for the thousands of pub owners and their staff to hear that line? The people who, this week, have been pushed further toward collapse. Trust between this sector and the government in doing the right thing has long left the building, the announcement yesterday from the prime minister just further underlined this. It is worth repeating, even if it is seemingly to a brick wall, hospitality is not the cause of covid-19 transmissions yet it continues to bear the brunt while supermarkets and others – actually everyone else – will soon be allowed to trade normally or closer to what they see as normal. Fair? Of course not, but we are too far down the rabbit hole for fairness to be an issue. And that’s before we get to Thursday’s tier tombola.

Maybe I was being naive, or perhaps guilty of giving this government one more chance to ease the burdens it has placed on this sector, but when we went into a second lockdown, I believed the worst that could happen was that we would come out into the tiers we had already been in. And remember some places like Leicester and many in the north, have been under lockdown-like restrictions for many months. But no, what we got instead was a further punch to the stomach, through the now obligatory late-night leaks to the national media. Does the government understand that mental anguish of this? Operators, who have been under relentless mental and physical pressure, get to read about these harsher restrictions just as they are switching off. It is cruel and absolutely devastating. And what do they read, tier three is a lockdown in all but name, tier two is, basically, the old tier three. Tier one is still an option, but how many regions expect to still be in tier one come Thursday? The prime minister said most of the UK would emerge from various forms of lockdown into a higher tier than they were in before it started. That is a disaster for pubs and restaurants with 76% of them saying that even under the old tier two conditions – in the middle – it was hardly worth opening because capacity was so constrained and alcohol sales so limited. As UKHospitality pointed out last week, that number of operators who believed their business would be viable rose to 94% under the previous tier three rules, which stated that pubs could only stay open if they offered a substantial meal. The hit to hospitality may also have a knock-on effect on retailers because fewer shoppers are expected to take the streets if access to pubs, bars and restaurants is heavily restricted. The sop the industry has been thrown is a relaxing of the 10pm curfew to 11pm, but this will mean nothing if half of the country is plunged into tier three.

And, of course, this is all to “save Christmas”. As UKHospitality’s chief executive Kate Nicholls said: “The government is making a point of saying that these measures are needed in order to save Christmas. In reality, they are killing Christmas and beyond for many businesses and their customers who look forward to, and rely on, venues being open at this time of year. Sadly, for many staff, it will be a Christmas out of work.” It is clear that for Johnson to get his much wanted “Boris saves Christmas” headline, hospitality is the sector that can be dispensable, or as Loungers chairman Alex Reilley put it: “Boris Johnson had to toss Sage a bone in order to get his ‘Boris Saves Christmas’ plans through. That bone was hospitality. It’s also clear that Matt Hancock and Michael Gove hate hospitality. The government is putting popularity ahead of livelihoods and jobs.” We know too well this government relies on polls and one over the weekend showed, on Westminster voting intentions, it had seen an uptick, meaning its strategy remained broadly popular. As I wrote earlier this year, if you want to take it down to the lowest common denominator, the British public wants two things, a summer holiday and Christmas, Johnson has delivered one and is now determined to deliver the other, and the hospitality sector will be cut adrift in order for that to happen. Martin Greenhow, managing director at Mojo (five bars in Leeds, Liverpool, Manchester, Nottingham and Harrogate), put it like this: “It really feels like hospitality is being tortured, and the only parallel I can draw is that it’s akin to waterboarding. We are closed down and then we are allowed out for a gasp of fiscal oxygen and then we are slammed back down again. And all of this is happening without rhyme or reason, no data, no evidence, and all based on presumptions of middle-aged men with little interest in the survival of our sector. We feel like we are being used as fiscal cannon fodder. We are thrown into the breach whenever a sacrifice is required, some form of sop for the government to show action when they are about to make a change. We seem to be the victim that can be thrown to the wolves.” Quite. 

The anger over this has only been increased over the past few days, especially as others get treated differently. As London Union founder Jonathan Downey tweeted: “As they tighten the rules around hospitality (where we know that infection transmission isn’t happening), they’ll be opening up elsewhere.” This includes sporting events and concerts. Writer Tom Parker-Bowles added: “Am I getting this right? Under new tier two, up to a thousand people can gather indoors for a concert. Yet in restaurants, you can only mix in your ‘support bubble’. And you cannot have a drink at all in a pub or bar unless with a ‘substantial meal’?” And then there is the support, or lack of it. The elephant in the room that is rent, remains. When will the government finally get its hands dirty here and force through a workable solution? My fear is that any financial help has been peed up the wall elsewhere. As Luke Johnson tweeted this week: “Test and Trace will cost £22bn in 2020 alone. Perhaps the worst waste of taxpayer money ever. This is the problem with government spending – no one in charge has skin in the game – so those in charge have wrong incentives. Hence, a bigger government = more waste.” A fraction of that expenditure could have eased some of the issues the sector is facing.

Operators across the sector will have Christmas trade naturally baked in at a high sales level in their budgets. Speaking at the CGA Peach event last week, Martin Wolstencroft, co-founder and chief executive of Arc Inspirations, said the company would usually generate £2m of bookings over the festive season, but that stood at closer to £50,000. Of course, operators will bend over backwards, again, to make things work. As one chief executive said to me: “Our experience was that after an initial hit, guests soon relax with the new measures and the damage isn’t awful. Trouble is, for many operators it will be the final straw with the mental health crisis now starting to bite – our work on well-being is helping but it’s an appalling situation.” This week has also seen more viable businesses, pre-covid, turn to restructurings, pushed over the edge by the second lockdown and news of what the next few months entails. And if we are angry now, imagine what the sector will feel like if it is punished in January if cases go up after the relaxation of household bubbles mixing over Christmas.

We now, sadly, wait on a postcode lottery to decide the fate of many businesses and jobs, across pubs, restaurants and bars, plus suppliers and the wider ecosystem that relies on the hospitality industry. As one supplier tweeted: “So the supply chain and operators won’t know which pubs and restaurants are in which tier until Thursday, giving three working days to mobilise thousands of venues for 2 December. I mean what can possibly go wrong?” Indeed. Yesterday, the IEA’s Head of Lifestyle Economics Christopher Snowdon pointed out Johnson describes the bankruptcies and unemployment that will result as “unavoidable hardship”. He said: “On the contrary, they are the wholly avoidable outcome of a deliberate political choice.” The government needs to answer three questions. What is the evidence for the restrictions? What are the criteria for moving between tiers? Where is the cost-benefit analysis? Past experience of Sage suggests there will be no credible answers.” And we still wait for the evidence behind why swathes of hospitality are being confined to the bin.

One question is how do we change the narrative, what can the sector do to fight back/force the government’s hand? My concern is that we have become too compliant, too polite, too thankful for whatever scraps we are thrown. Nicholls quite rightly pointed out, early doors in the crisis, the government responded to the issue of jobs and, more importantly, jobs for 18 to 24-year-olds. By continuing to punish the hospitality sector, they are also punishing this age group and the next generation looking to take their first steps into employment. Many people have spoken about the opportunities there should be for more entrepreneurs to enter the sector next year, how many will want to when they can see how the government currently treats those trying to make a go of it in hospitality? So, if it isn’t about job creation and being a solution to help with the economic recovery, what other cards do we, as a sector, hold? Is now the time to go on the attack? Let some new voices come to the negotiating table. The likes of Tim Martin, James Watt, Downey and (Luke) Johnson may not be everyone’s cup of tea but they would certainly stir things up. Ultimately, it will be public opinion that will change the government’s course, and it is good to see The Sun starting to openly question its strategy, because it is the newspaper politicians take most note of. We assume everyone loves their local pub or restaurant, so we still have a dog in the fight if we can harness that. One idea put forward is to shine a light on this lack of evidence for keeping the sector down and force the government to present it to us, by having a national blackout of hospitality. As one operator put it to me, “for one day, all those capable of opening would stay closed in solidarity with those that cannot open. If the big beasts got behind it, it could be big, and highlight the role we play and what would be missed”. It could have legs but only if everyone, from McDonald’s to Oakman Inns, and Greggs to Deliveroo bought in. It is obvious that peaceful protests in Parliament Square and petitions won’t cut it anymore. As restaurant consultant and boss of the Northern Bar and Restaurant exhibition Thom Hetherington said: “3.2 million people are employed in the hospitality sector, with millions more in the dependent supply chain. I hope we all remember this government’s political sacrifice of our livelihoods, their lies and arrogant rejection of scrutiny or justification, at the next election. Boris already runs a serious risk of going down in history as ‘the man who broke up the United Kingdom’, I cannot fathom why he also wants to add ‘the man who killed off the British pub’ to his CV.” The fight must continue so we can get back down The Winchester when this is all over.
Mark Wingett is Propel insights editor

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