68% of pubs need furlough beyond June to survive

By Nicholas Robinson contact

- Last updated on GMT

Support: most pubs would need furlough to be extended
Support: most pubs would need furlough to be extended

Related tags: Coronavirus

More than two thirds of pub bosses asked in a snapshot poll of hospitality industry leaders have said furlough will need to be in place for longer to ensure the sector’s survival.

A further furlough extension would be “extremely important” to the future of pub businesses, 68% of pub operators said in response to a new Hospitality Leaders Poll launched this week by HIM/MCA Insight, a division of The Morning Advertiser​’s parent company William Reed.

The weekly poll of 700 business leaders, including more than 380 pub bosses, from across the eating and drinking-out sector showed the sector will need a considerable amount of long-term financial support in the months ahead just to survive.

Most pub bosses believe their businesses will struggle to make a profit if sales drop by just 10%​, while 55% told the poll that a lack of consumer confidence​ and reduced footfall were big concerns for the future.

Just 10% of respondents said a furlough extension was “not so important” or “not at all important”, while 5%, 17% and 68% respectively said it was either “somewhat important”, “very important” or “extremely important”.

Social distancing

Most of those calling for a furlough extension believe in its importance because the trade won’t be able to open viably under social distancing.

“The best way for the industry (and its people) to survive is if we stay closed and stay supported until both medical and sentimental fears have subsided,” said a multiple operator.

“This will require extended furloughing, a rates break and new support with rents, but will ensure the business model works when we return, and that all of the Government support will not have been for nothing.

“And it won’t take long. Our friends and customers will be excited to return once they know it’s safe.  Let’s hold demand back until we can contribute to a secure, celebratory society. After all, that’s what we do best.”

Yet, there was also the requirement for further support from landlords, with more than half (54%) of pub bosses asked saying a rent holiday of nine months or more was “extremely important”.

Some 13% said a nine-month rent holiday was “very important”, 8% said it was “somewhat important”, just 5% said it was “not so important”, while 20% said a nine-month rent holiday was “not at all important”.

Help with rents

Two mainstream initiatives are currently active in the hospitality sector – #NationalTimeOut and #NoPubNoRent – to urge landlords to help tenants with their rents.

Key facts – loan access

When asked how important access to loans was, pub operator respondents said:

  • 24% – extremely important
  • 20% – very important
  • 23% – somewhat important
  • 19% – not so important
  • 14% – not at all important

One single-site operator said pubcos must give a rent-free period “for the duration of the close-down or the British pub industry will never be the same again”.

Another single-site operator added: “The [Government] grants may need to be extended where landlords refuse to give a rent holiday.”

While the founder of a multiple site operation said: “If we cannot operate as normal then we will need substantial support regarding rent and staff costs going forward.”

Meanwhile, when asked about loan access, just under a quarter (24%) of respondents to the poll said such financial support was “extremely important”.

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