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Weak consumer confidence post-lockdown ‘big concern’ for pubs

By Nicholas Robinson contact

- Last updated on GMT

On-trade worries: fear pubs will be worse off when allowed to reopen
On-trade worries: fear pubs will be worse off when allowed to reopen

Related tags: Coronavirus

More than half of hospitality bosses quizzed in a snapshot poll have said a drop in consumer confidence post-lockdown would be one of the biggest impacts on maintaining a profitable business.

As the sector battles to access Government grants, loans and barter for rent relief to ensure it reopens in as strong a financial position as possible, the big worry once pubs are allowed to reopen will be whether or not enough customers come back.

More than half (55%) of respondents to a new weekly Hospitality Leaders Poll launched this week by HIM/MCA Insight, a division of The Morning Advertiser’s ​parent company William Reed, said weak consumer confidence and low footfall were a big concern for them ahead of reopening.

Almost 700 business leaders, including over 380 pub bosses, from across the eating and drinking-out sector responded to the poll, highlighting the grim fact that it won’t be business as usual for a long time.

The majority (39%) of pub bosses asked have already said that anything more than a 10% drop in sales​ would prevent them from remaining profitable, with a significant proportion of those citing weakened consumer confidence and potential physical distancing rules the most likely to result in a sales plummet.

A pub owner told the Hospitality Leaders Poll that any restrictions on the numbers of people being allowed into a venue would be deeply troubling.

“I am extremely worried that if we are given the go-ahead to open with restrictions, I would not be able to pay my staff and keep all of the overheads [under control],” they said.  

“This would be financial suicide even more than it is currently.”

Many variables

A multiple pub operator urged that not all pubs should be lumped together, since there are many models and variables within each business.

“It is vital that all pubs aren’t clubbed together by Government when they make decisions for our future,” he argued.

“Our pubs have, on average, 70 seats and are high turnover for their size. They would be reduced to 30 seats at most if we were made to open with restrictions.

“We simply could not afford to work this way. Our bars are small and our kitchens are smaller too... how do I distance my team?

“I remain positive, but our pub model doesn’t work with two-metre spacing.”

The sheer burden and responsibility of ensuring both staff and customers adhered to physical distancing would be overwhelming in its own right for the trade, another multiple site MD said.

“If the burden of responsibly for compliance with distancing is put on the operator, the cost of reopening will become significantly more prohibitive,” he claimed.

Assurance that the coronavirus is no longer a threat would be the only way the sector could return to any level of normality, said a single-site operator in response to the poll.

Virus has been eradicated

“We all need to be confident that the virus has been eradicated or that it is of minimal risk before hospitality businesses reopen,” he explained, pointing out that social interaction is at the heart of his pub.

“I won’t reopen until consumer confidence is restored because there’s no point offering an experience with no atmosphere.”

The owner of another single-site pub business said even with physical distancing in place, there would still be a health and safety risk to staff and customers.

“My kitchen will not work with a separation because it’s too small and the menu too complex,” he said.

“The pub is full of locals that like to chat to the bar staff – that will be impossible.”

Meanwhile, there is also the risk that low confidence among consumers, who have spent months at home drinking cheaper alcohol and food, could be less incentivised to get back into the pub.

“We fear that after many months of lockdown, customers will have become used to subsidised drinks from supermarkets and may not return to what they will see as the more expensive option of drinking in pubs,” he said.

“Unless the Government tackles the rates of duty and tax for on-trade venues, the pub and independent brewing sectors will be vastly reduced.”

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