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Morning Briefing for pub, restaurant and food wervice operators

Mon 19th Apr 2021 - Trade bodies again call for three-month extension to business rates cancellation over fear of businesses being ‘unviable’
Trade bodies again call for three-month extension to business rates cancellation over fear of businesses being ‘unviable’: Sector trade bodies have again called for a three-month extension to the business rates cancellation as a survey revealed almost a quarter of operators believe their business will be unviable before the end of the year based on current trading estimates. UKHospitality, the British Beer & Pub Association and the British Institute of Innkeeping have welcomed the reopening of pubs and restaurants that have outside areas but have warned there is still a long way to go for businesses to recover from the devastating impacts of the pandemic. They warned the majority of businesses are still in very real danger of failing. The survey of members from all three trade bodies by CGA showed only 40% of pubs have been able to welcome customers back to their outside spaces, with turnover only expected to be 29% of that achieved over the same period in 2019. This is despite an average of more than £8,000 a site being invested in outdoor areas and safety measures. Even when step three of the roadmap allows indoor drinking and dining for six people or two households, they are estimated to only reach 56% of turnover when compared with pre-pandemic figures. The trade bodies are calling for business rates to be cancelled completely in England for hospitality until October 2021, to allow businesses time to recover before yet another cost comes back online. This would cover an additional three months, with rates currently set to restart in July. In Scotland and Wales, hospitality has a full year of business rates holiday. A joint spokesman for the trade bodies said: “It’s important to note even when restrictions are fully lifted in June, our members will still only be achieving 80% of the turnover seen in 2019, a figure which at any other time would have been untenable, so more support is going to be needed in the long term. Their businesses are teetering on the edge of survival and they will now be facing their business rates becoming due on 1 July, with potentially only one full week of restriction-free trading under their belts. For many, this will be the last straw, jeopardising the jobs that have been protected by the furlough scheme until this point. We need to see a full cancellation of business rates until at least October to allow them the breathing space to recover their businesses.”

Three in four of England’s licensed premises remain shut following return of outdoor-only service: Three in four of England’s licensed premises remain closed following the return of outdoor-only service last week, according to latest figures from the Market Recovery Monitor from CGA and AlixPartners. A total of 20,832 venues were trading again by Thursday 15 April – 23.2% of England’s 89,953 known licensed sites. Reopenings have been more widespread in the pub sector than restaurants, thanks to the wider availability of beer gardens, patios and other outdoor areas. Four in ten (39.1%) of England’s food pubs have been open, alongside almost one third of community pubs (31.6%) and high street pubs (29.9%). Reopening has been more difficult in the restaurant sector, where outdoor trading space is often limited. Fewer than one in eight (11.8%) sites in the independent-led restaurant segment have opened, though casual dining restaurants (23.5%) have been quicker to return. By region, openings have been spread quite evenly across the country, reaching a high of 24.4% in the central and east, and a low of 21.8% in the north of England. All licensed premises in Scotland and Wales remain closed until later this month. Karl Chessell, CGA’s business unit director – hospitality operators and food, EMEA, said: “Three in four venues in England remain closed, and while some may open over the next few weeks, we will have to wait another four weeks until it is feasible for many hospitality venues to reopen again. Until then, operators deserve support from local authorities to make the most of outdoor trading space – not to mention some sunshine.” AlixPartners managing director Graeme Smith added: “While reports of strong consumer demand this week are welcome and while operators are driving sales where possible through use of their outside spaces, the stark reality is this trading represents a small proportion of normal revenues and most will be making a loss. Many challenges remain during this reopening phase and the months ahead.”
AlixPartners is a Propel BeatTheVirus campaign member

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