'Sadly I feel that the government has gone: 'okay, that's hospitality done' '

The  Staff Canteen

The Staff Canteen

Editor 17th July 2020

After a short period of restaurants having reopened in England, how many operators are ready to face the months to come?

For the government to have implemented as many measures to save the hospitality industry as it has has been a surprise to many. But as the only-just-managing businesses are closer to the brink than ever, stakes are, as always, very high,

Given the difficulty of the situation, and the speed at which decisions had to be made, how many businesses have slipped through the net? What does the industry believe the state should do to support it now?

VAT + the Eat Out to Help scheme

Thoughts on the measures already taken by government vary, but it is undeniable that they have provided much needed solace to some more than others. 

Gordy McIntyre, whose joint venture with chef Pip Lacey, Hicce, has operated at 40 percent capacity since it reopened, said: "Any help is good and we appreciate it.".

The difficulty lies in other costs - produce is still worth the same, and suppliers expect to be paid - and whether the public understands that the relief isn't going to suddenly lead to a big drop in prices, because businesses don't have that leeway. 

"We've already hit our margins just to get started," he said. 

Michelin-starred chef Paul Ainsworth added that while his restaurants in Padstow and Rock -  No. 6, Rojano's and The Mariners - in Cornwall are open, it's going to take more certainty and time before they can breathe easy.

"Me and my wife have spent a significant amount of money to keep everyone in a job and to keep our company alive," he said. 

"More needs to be done, because there's only so much debt that we can continue to go into before it's not viable anymore." 

For Tom Kerridge, whose businesses are reliant on food and accommodation as well as alcoholic beverages, the tax reductions and Eat to Help Out scheme introduced last month were very welcome. 

"It's a bigger VAT drop than I was expecting, which undoubtedly helps the industry," he said. 

However, he added "I find a little perplexing," "confusing and unfair" that the exemption excludes alcohol, as wet-led businesses are expecting to suffer the most, despite having been in dire straights before Covid-19. 

"It feels a little bit like they won't have had the support." 

While for his businesses the measures have been beneficial, the general bigger picture of it is not as helpful for many small individual establishments, "nor does it address the issue of high rentals," he said.

Jonathan Downey, chef and owner of Milk & Honey, urban food ventures Street Feast and London Union and leader of the Hospitality Union campaign calling for a National Time Out, pointed out that while the percentage of VAT cut was is limited by our membership of the European Union, the government could have circumvented this quite easily. 

He said: "He [Rishi Sunak] should have done it for a year, he should have backdated it to July and he should have done it in everything in hospitality," instead of cherry picking among different types of businesses. 

Piers Baker, whose two establishments - The Sun Inn in Dedham and Church Street Tavern in Colchester - still suffer from reduced footfall despite being located outside of the capital, said: "On the whole, government is trying to do little bit by little bit.

"We just need a big bit sooner, to give everyone confidence in how we're operating, and also then for customers to come out and reap the benefits of what we can do," he added.

Rent

With the lease forfeiture moratorium extended until September, Jonathan said, his NTO campaigns demand aren't far from being met.

But in this time, he said, "we need government to provide a framework and a new arrangement so that landlords and tenants working together, and landlords and banks working together can just agree a national rent deal." 

With 250,000 venues in the UK hospitality sector, "we can't all negotiate individual deals with our landlords.

"Government knows this, and they know they need to step in. I think they're just reluctant to because the real estate lobby is strong and they all vote conservative and they're some of the richest individuals and some of the wealthiest companies in our country.

"They need the least help - but we have to help landlords to some extent." 

Surprised that more government aid hasn't yet been rolled out, he said, the Chancellor of the Exchequer "has just thrown thirty billion pounds at chain restaurants that are backed by private equity and venture capital."

He added: "Four billion pounds would pay the rent for every single hospitality venue in the UK for a year.

"It doesn't need to be that generous -  it could be half of that.

"I worry that the cash has run out and that we're maybe no longer able to do anything - but my idea for a NTO doesn't cost the taxpayer anything. It's about sharing the pain between the tenants, the landlords and the bankers." 

What's next? 

While all of our panellists explained that they're hoping for more support, namely with rents but perhaps with grants supporting the self-employed, as well as independent restaurants, the concern is indeed that the Chancellor has nothing more to give.

Tom: "Sadly I feel that the government has gone: 'okay that's hospitality done, we've given them all a £10 voucher to go out for lunch and we've reduced VAT.'

"I think they might be going: 'that's it guys, get on with it.'

"Don't get me wrong, I'm hopeful - but I've got a horrible feeling."

Piers said that he recently bumped into his local MP, who gave him the impression that the government is still listening to the hospitality sector. 

He said: "I think it's really important that everybody who's got a business is - tell your MP what's going on, because they will get the message, hopefully, to more important people in government." 

Is government aid relevant if customers don't follow?

Newspapers may don headlines about how customers have gained an understanding of supporting local businesses and newfound appreciation for restaurants - but British customers have fallen back into bad habits. 

Last week's 27 no-shows at Kerridge's Bar & Grill go to show that no restaurant, no matter who is in charge, is free of these problems. 

"That's over a quarter of our revenue, we man powered for, we got food in for, we got ourselves set up for. For them to not show up - you enter a very difficult position and an uncomfortable one," he said. 

"To be honest," he continued, "it's the same old problem that we've always had in this industry, except now it's highlighted even more - so because you're bringing starting levels back so you're trying to secure people's jobs, livelihoods, their careers, their family." 

"For people not even to have to courtesy to make a phone call and let you know they're not coming, that's the thing that I find just incredible, that it's downright selfish and rude, and I cannot believe that right now the industry under the pressure that it is, that people still think it's okay to not ring us and let us know." 

But the issue of no-shows, and protecting restaurants in this difficult time, he said, "isn't about me."

Given his media profile, the chef felt it important to make waves and call out this sort of behaviour, so as to help independent businesses who may not have that sort of leverage. 

Whether customers like it or not, many in the industry need to take measures like this - they already did before, but even more so now - to stay open and focus their energy on getting back from the brink. 

"This is about the smaller independent guys that are often forced into a position where they feel uncomfortable asking people for their credit card details and letting them know that there's a booking policy." 

Whether customers like it or not, many in the industry need to take measures like this - they already did before, but even more so now - to stay open and focus their energy on getting back from the brink. 

"When a little guy in an independent restaurant says something, no-one's listening," Tom said.

"So now that hopefully people are listening, it gives restaurants the opportunity to be able to take reservations with a booking system in place and a cancellation policy. Because having had to remove tables, the worry about bringing people back from the furlough for everybody - it's huge." 

Hopes and the future

Despite all the hardship, the relief of reopening has been great - reminding them all why they were willing to endure closure in the first place. 

Gordy said: "It was massively emotional for me, and I'm not very good with my emotions.

"The biggest, proudest thing was getting our guys back and their reaction," he said.

"It was just a great feeling."

Hospitality, he added, "Is all I know to do and it's hopefully what we can continue doing for a long time.

Looking to the future, Jonathan is hoping to see a full, thought out return to normal. 

"We've got to find a way through this before a vaccine if possible," he said, mentioning a plan drafted by The boss of Live Nation’s Festival Republic, Melvin Benn, to get hospitality and live entertainement back to full-capacity by November. 

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The  Staff Canteen

The Staff Canteen

Editor 17th July 2020

'Sadly I feel that the government has gone: 'okay, that's hospitality done' '