Trade warnings as UK is in shutdown ‘in all but name’

By Gary Lloyd contact

- Last updated on GMT

Warning from trade: UKHospitality's Kate Nichols and Greene King's Nick Mackenzie have called for support
Warning from trade: UKHospitality's Kate Nichols and Greene King's Nick Mackenzie have called for support

Related tags: Finance, Health and safety, Social responsibility, Multi-site pub operators, Tenanted + leased, Pubco + head office

UKHospitality has warned of the costs of potential closure for the hospitality sector while Greene King said the trade is already in shutdown “in all but name”.

Responding to speculation over the weekend about a potential imminent announcement of further Covid restrictions, UKHospitality chief executive Kate Nicholls said: “Trading has already been hugely damaged by the steady stream of pessimistic news following the discovery of the Omicron variant, at a time when hospitality would normally expect to be making a quarter of its annual profits.

“We know from previous lockdowns that it causes venues to haemorrhage cash. It costs £10,000 to close each site and a subsequent £10,000 per month on overheads, and that was with full furlough and rate relief. The damage that closure wreaks on consumer confidence would also increase recovery time considerably, not least because it would be coming early in the year, at the slowest period of trading.”

Urgent help needed

Meanwhile, Nick Mackenzie, chief executive of Greene King, told the BBC​ bookings had been "decimated" across the business amid the rapid spread of the Omicron coronavirus variant and that the country was in lockdown “in all but name”, due to government messaging.

He called on the government for “urgent” help as the pubco faced an “incredibly difficult” situation.

“Demand has dropped, bookings have been decimated, in some parts of the country we are 70% to 80% down on 2019,” he said.

He also told the BBC​ the government should be commended for the measures it took to help sector businesses earlier in the pandemic but said more help was needed now.

Furlough support

Mackenzie said: “We need them to move towards things like furlough support for [pubs] that we are having to close or those severely impacted, business rates relief, and removal of the cap on business rates.”

Nichols added hospitality venues had invested huge amounts of money and resources to ensure a safe environment for customers and staff and “businesses have always wanted to trade their way through to recovery and that sentiment is stronger now than ever”.

She continued: “However, trading levels are so poor that the need for proportionate Government support is already acute, and urgently necessary if businesses, jobs and livelihoods are to be secured. An extension to business rates relief and the lower VAT rate will help longer term planning and budgeting but speedily delivered grants will be vital to short-term business survival. To minimise further damage, it is also crucial that the Government gives as early a signal as possible about whether measures are to be imposed and what they might be, in order to allow businesses to salvage something from Christmas and the new year.”

Related topics: Legislation

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