As we move into the second week of lockdown, fears are rising that the sector’s venues may be substantially reduced in December. This has been indicated by latest Market Recovery Monitor from CGA and AlixPartners.
The report indicates that 69.9% of Britain’s total licensed premises were trading at the end of October 2020 - a fall of 10%, equivalent to over 12000 sites since the previous month. Of course these figures make bleaker reading as Tier three areas had just over 50% of licensed premises open when the lockdown came into play. This doesn’t include the ‘firebreak’ closures in Wales, Scotland and Northern Ireland.
These worries are compounded for smaller businesses with 63% of independent sites open at the end of October - nearly 1/5 less than managed venues. This suggests the obvious; that well-capitalised pub and restaurant groups will be better placed to survive the second lockdown.
Now, more than ever it is imperative that there are ways to address the bottom line that all businesses (especially independents) incur just by reopening to trade. These indications are directly related to the hospitality industry as it has been one of the hardest hit initially although the repercussions are expected to hit every sector.
AlixPartners’ Managing Director, Graeme Smith said:
“The recovery of hospitality has been halted by the second lockdown in England and with the government stating that, once lifted, the country will return to the tiered system and significant trading restrictions, the question must be whether some of these sites will ever reopen under their current ownership.
A strong dose of dynamism and determination will be required to stay in the game. Now the government has provided welcome assistance with wage costs, companies will be looking to Westminster for further support to help solve the sector’s rising debt mountain, especially when it comes to rent and the stalemate many are experiencing in negotiations with landlords.”