Roadmap ‘too little too late’ and ‘worse than the worst-case scenario’

Sector leaders have criticised the Government for once again “penalising hospitality” with its reopening strategy, forcing pubs and restaurants to wait a further three months before they can operate inside.

The proposed reopening timeline has been branded “too little too late,” and “worse than the worst-case scenario” by operators from all corners of the sector, who have warned that without significant support in next week’s Budget, there will be a “devastating” fallout for businesses.

Simon Longbottom, CEO of Stonegate Pub Company said the reopening timetable unfairly penalises hospitality, with the majority of businesses forced to remain closed because of the outside-only reopening rule on 12 April, whilst alcohol sales in supermarkets and off licenses will continue to “fuel unsupervised drinking in outside places.”

“Not permitting takeaways from pubs until April is nonsensical given the relaxation of outside gatherings,” he told MCA. “The removal of the curfew and tier system adds some sense to the plans, however it still leaves much doubt about the financial support businesses will receive as we navigate the phased re-openings between April and June.

“Another four months of uncertainty looms with the constant review of the reopening dates.”

Loungers chairman Alex Reilley told MCA he had hoped hospitality would be able to operate for Easter, and said he was concerned by both the Government’s ‘at the earliest’ caveats to proposed dates, and the suggestion that businesses will be given just a week’s notice for reopening.

Reilley said that Loungers would be unlikely to reopen more than 10% of its 170-strong estate on 12 April, adding that whilst it has sufficient cash to “weather the storm,” many do not.

“For a large chuck of the sector today’s announcement is absolutely devastating,” he said. “Let’s not be in doubt, thousands of hospitality businesses are now going to fail, particularly if the Chancellor does nothing more than extend existing support measures.”

Hugh Osmond, who’s Various Eateries backs the Coppa Club and Tavolina brands, referred to the roadmap as an “absolute fucking disgrace” given that hospital admissions and deaths are “dropping like a stone.”

He told MCA that the vaccination program is well ahead of schedule, and that the SAGE commissioned models showing potential for a higher death toll if restrictions are removed faster are based on “ludicrous” assumptions about lack of vaccine effectiveness and reduced rollout or uptake.

“Unless a totally new variant comes along which is far more infectious, far more lethal, completely evades the current vaccines, or cannot quickly be prevented by a modified vaccine, then they have overestimated potential deaths by a factor of 10x to 20x,” he said.

“Schools should have opened today. All of sit-down hospitality should be open by 8th March. Unless that causes a major increase in hospital admissions and deaths, everything should be open by 1st April.”

Mark Davies, CEO of Hawthorn, said that other than its clarity around dates, the roadmap provided little else for the sector to be positive about. Whilst he welcomed the removal of the curfew and substantial meal rule, he added that the outside-only opening in April “simply won’t work for most pubs.”

“Although over 80% of our community pubs have outdoor space, it’s likely that most pubs’ trading capability will continue to be impaired at levels well below normal operating levels, making them simply unviable,” he told MCA. “That’s before we have to factor in the Great British weather.”

Davies said he plans to write to the Chancellor this week to stress the urgency now required for further support in the form of grants, and rates, VAT and beer duty relief, to support pubs until 21 June.

“Without all of this I will make it clear there will be so many communities in this country that will lose their Community Pub forever,” he said. “No Government should want that on their watch when the parliamentary constituencies that vote for them rely so much on their local pub as a community asset.”

Patrick Dardis, CEO of Youngs, said the dates for reopening were worse than even its worst-case scenario. He told MCA: “We were hoping for an April re-opening – but planning for a worst-case scenario of 1 May. We didn’t get either, so three months away from opening is very disappointing.”

However, he said that at least it gives Young’s the certainty it needs for planning its reopening strategy. “I have to admit that a clear roadmap with dates was a big ask. The PM delivered on that and at least we can plan,” he said.

The introduction of the outside rule of six/two households rule from 12 April is not hugely helpful for Young’s he added, and most pubs cannot be viable just opening outdoors – “this is not the Mediterranean. We will, in desperation try to open some pubs outdoors-only in April.”

D&D London chairman and CEO Des Gunewardena said the business will look to open around half of its UK estate – those sites with sufficient outside space – on 12 April, but referred to the proposed full reopening date of 17 May as “terrible.”

“First, we thought March, then we thought April, now we are told 17 May. And this despite the UK vaccine programme going brilliantly,” he told MCA. “By contrast, in New York, where the vaccine programme is not going brilliantly, we were allowed to reopen last week. Go figure.”

Gunewardena said that faced with many businesses facing another few months of closure, the Chancellor must “step up” in his Budget announcement next week.

“Government has a duty to fully financially compensate those businesses,” he said. “That means boosting lockdown grants to meaningful levels, sorting out the rent situation once and for all through a legislated solution, and extending the current business rates and VAT reliefs for a further 12 months so restaurants have a chance to return to financial health.

“Time will come when Rishi will need to raise taxes to reduce his debt, but now is the time for him to support us in reducing ours.”

Greene King CEO Nick Mackenzie said he was disappointed not to be able to open alongside non-essential retail, adding that many pubs will have to remain closed despite outside-only reopening being permitted from April.

“Next week’s Budget needs to bring positive news as we continue to burn tens of millions of pounds in cash every month,” he said. “An extension to furlough, the business rates holiday and hospitality VAT cut for another year, as well as providing additional targeted support to those most affected, will help project jobs and the future of the great British pub.

“As we look to June, we need clarity on what the full lifting of restrictions looks like so we can plan for pubs to be open as normal once more.”

Peter Marks, CEO at Rekom UK – formerly Deltic – said that having been so used to receiving no news as a late-night operator, the mention of nightclubs as part of the roadmap has left him “delighted.”

“It was always going to be too cautious for most and I know that most will be furious at missing out on Easter given the vaccination success that was described as spectacular earlier today,” he told MCA. However he added that businesses will need additional financial support to cover fixed overheads, “and above all we need a soft landing on the other side of the rent moratorium.”

Corbin & King CEO Jeremy King considers the exit plan to be “too little too late,” and expressed concern about the Government’s tendency to change course. “They might still change their mind,” he told MCA. “They are a law unto themselves. Too many companies will be destroyed by the blundering, illogical, posturing of the incompetent and ill informed.”

Hawksmoor CEO Will Beckett said the announcement was difficult to hear; “ten weeks is a long time,” he said. “Although the news that most restrictions will be lifted by 21 June is a silver lining.”

Beckett told MCA that there are two problems with the Government’s plan: the lack of both financial and emotional support. “There needs to be greater support from government if a sufficient majority of the industry is to survive until May,” he said. “And secondly, the big problem is mental wellbeing; people need to get back to work.

“Every week counts, and ten feels a long time given we have had the strictest lockdown in the developed world as well as one of the fastest vaccine rollouts.”

Andy Laurillard, founder of Giggling Squid, told MCA that he supports the Government’s cautious data-driven approach, despite being eager to start serving customers again. “The pirouetting following the end of the first lockdown played havoc with staffing, stock and supply chains,” he said. “So now we hope they deliver what they are promising - and that this will be the last closure period.”

City Pub Company CEO Clive Watson said the proposed reopening dates are “not ideal,” but added that he broadly welcomes the roadmap if it makes reopening irreversible. City Pub co will be able to open two thirds of its sites on 12 April, and over 80% by 17 May, he told MCA, adding that the Government must pull back furlough “gradually,” and that business rates relief, the VAT cut and rent moratorium must be extended.

“My worry going forward is that a lot of pubs will reopen with too much outstanding debt and pubs need time to trade themselves out of this pandemic,” he said. “The sector will remain crippled for at least 2 years and there will inevitably be pub closures. The Government will need to see how it reduces the tax burden on the industry going forward.”

Mowgli founder Nisha Katona told MCA it was “almost hurtful” that non-essential retail and gates into gardens will be allowed to open before regulated, covid-safe hospitality environments, and said it was clear that the sector “continues to be brandished as the scalp necessary to ward off the covid demons.”

“This smacks of no appreciation or understanding of the role that hospitality could play in the universal aim of opening the country safely,” she said. “It speaks only of the need for a token scalp. False hope came from the language of transparency, of data. The reality is still an unfathomable and eviscerating dark art.”

Simon Potts, CEO of The Alchemist, said that though the roadmap feels “ultra and unnecessarily cautious” given the success of the vaccine rollout, he added that it is “undoubtedly better to have firm-ish dates to work toward for us as a business, as it at least allows us to plan.”

Potts said that “all attention” must now be given to a serious addition of support for the weeks ahead, and that a better understanding of the cost of the furlough scheme on hospitality companies needs to be matched to a reimaging of the CJRS bonus.

“Rightly or wrongly hospitality has been singled out on the last page of the map,” he told MCA. “So we need to see better targeted support for the sector to ensure we are all still there come May.”

Rare Restaurants CEO Martin Williams, who’s restaurant group operates M Restaurants and Gaucho, welcomed the plan, but expressed his disappointment that reopening timings were not aligned to the vaccine rollout – which has already covered the most at risk groups.

“This further delay forces hospitality to remain closed for business, whilst accruing costs and burning cash,” he told MCA. “This will undoubtably result in the estimated 40% of restaurants closing and up to a million jobs lost.

“The onus is now on the Chancellor to create a legitimate support package which extends rent, VAT and furlough support along with the rent moratorium until the end of the year and in addition offers a legitimate grant package, fit for purpose and available for all.”

Matt Snell, CEO of Gusto Restaurants, told MCA he was “extremely disappointed” with the dates given for reopening. “I really thought 1 May would be worse case scenario, so to end up with a date almost three months from today is a real kick in the teeth,” he said.

Gusto will remain closed until it can reopen for dine-in experiences, explained Snell. “Outside-only has so many variables that it will not be possible to operate profitably,” he said, adding that the news that its opening plans will have to be pushed back also means it will leave Gusto’s team furloughed for longer, “costing the government more money”.

Snell said the announcement gives as much certainty as an date can in terms of business planning, but added that it will introduce a whole new level of uncertainty across the industry – “that will be whether or not operators have the cash reserves to make it until 17 May”.

Inception Group co-founder Charlie Gilkes said that allowing venues to open outside from 12 April offered little comfort as many operators, especially those in London, won’t benefit. He said that another three-month closure for the hospitality will be “devastating,” and should serve to highlight the urgent need for more support in the upcoming Budget.

“Larger grants to cover fixed costs and extended VAT cuts, furlough and business rate relief for the remainder of 2021 are the bare minimum needed to save businesses from complete collapse,” he told MCA. “It is also imperative to remember that capacities are severely limited with any form of social distancing in place and it’s essential we can trade unrestricted from 21st June, by which time the large majority of the adult population will have been vaccinated.”

As announced by the Prime Minister yesterday afternoon (22 February), the country is set to pursue a four-stage reopening strategy, which will see pubs and restaurants permitted to reopen outside spaces no earlier than 12 April, followed by an inside reopening from 12 May.

Both outside and inside reopening’s will see a return of the rule of six, though the curfew and substantial meal rules will not be reimposed.

Subject to the continued success of the vaccine rollout and its effectiveness on hospitalisations and case numbers, legal capacity limits – including the rule of six – could be dropped from 21 June.

Any additional financial support for the sector will be revealed by Chancellor Rishi Sunak in next week’s Budget (3 March), where he is expected to announce an extension to the business rates holiday and furlough scheme.