Hospitality UK: A Year in Review

Coronavirus has brought hospitality and events to their knees this year. Enforced closures and paltry support abounds. We look to 2021 we look through a glass darkly for the future of our pubs and restaurants, hotels and venues. Not to mention the intricate webs of supply chains that support them.

You would be hard pressed to find anyone, particularly any business, that has not suffered this year, although arguably it has been relatively rich pickings for essential retail. However, pubs have suffered with greater restrictions than perhaps any other sector, and with little financial support to help see them through. To take an arbitrary example, it was reported that airlines received a £16.18 billion bailout in June to help support 53 companies. Don’t get me wrong, I understand it costs more to run an airline than it does to run a pub – but their business has been able to continue to operate, albeit at reduced capacity when non-essential travel was banned.

There were also grants made to some of the largest operators. Fullers and Youngs for example with commercial paper being issued under the Covid Corporate Financing facility. This is likely to leave large operators in a stronger position than most, post-Covid. This may have interesting implications for the Pubs Code and the everlasting debate around monopolies within the industry.

The rest of us (except the Isles of Scilly basically) drop into Tier 4 today. Here is a round up of some of the key events for pubs and hospitality in 2020. Obviously it is a hugely simplified view of the impacts on different types of businesses in different parts of the country. As we know all too well here in Leicester!

January 2020

• Takeaway was already taking market share away from eat in. This posed a threat to restaurants and food pubs that could not adapt.
• Fuller’s sells its brewing arm to industry giants Asahi. This was a move which would soon prove to be most timely, providing much needed liquidity during lockdown. Fullers were one of the first pub companies to cancel rents for commercial tenants during lockdown.
• Reports of the Pub Code Adjudicator’s December ruling against Marston’s begins to hit the press. The 72 pints scandal was first made public through some great investigative journalism by Jonny Garrett.

February 2020

• Pretty quiet month for you lot. I got diagnosed with gestational diabetes. Which suuuuuuuuucked.

March 2020

• 16th March – new Coronavirus suppression measures are announced. The Prime Minister strongly advises people to avoid pubs, clubs and theatres. However he does not bother to formally close those businesses. This leaves thousands in turmoil about whether their insurance would cover the losses.
• Panic buying in supermarkets has already begun. The most vulnerable (now including pregnant women) are told to stay at home.
• 23rd March – lockdown begins as people are told they must stay at home. The furlough scheme is announced. It has subsequently been through several iterations and is currently available until April 2021. It was replaced by the emergency jobs scheme in October but this was reversed with the introduction of the tier system. Great for employees, not so great for employers who still need to pay tax and insurance even when they are forcibly closed and have no income.
• Pubs and breweries adapt by providing takeaway services where they can.

July 2020

• Pubs and restaurants are allowed to re-open. They are given strict measures regarding distancing, screens, face coverings, table service and recording customer details. Additional staffing costs are huge as pubs are required to greet and seat every guest, police one way systems etc. Pubs make large outlays on staff, signage and PPE to meet the requirements.
• The Eat Out to Help Out scheme begins.
• Leicester does not come out of lockdown.

August 2020

• 3rd August – The good people of Leicester finally get to go to the pub. We have a Golden Age until 4th November.

September 2020

• Schools and universities go back. In unrelated news, infection rates rise.
• The Rule of Six introduced
• 24th September – new restrictions are placed on pubs including a 10pm curfew. Table service becomes a legal requirement and customers must wear face coverings at all times unless seated at their table.

October 2020

• Increasingly confusing local restrictions have been introduced in an abysmal failure to deal with local outbreaks for months. The system is replaced by a consolidated Tier system of ‘medium’ risk to ‘very high’ risk areas – only applied to Liverpool originally.
• Pubs could only stay open in the high risk areas where they operated as a restaurant. They are told to provide a ‘substantial meal’ with alcoholic drinks. They are also told that everyone is clear what constitutes a substantial meal. No-one is clear on what constitutes a substantial meal.

November 2020

• The second national lockdown takes place for 4 weeks. At first it was announced that the sale of takeaway alcohol would be banned, which was soon retracted.

December 2020

• The second lockdown ends and a variant on the Tier system returns. In Tier 1 pubs can open with a curfew. In Tier 2 they may open with the ‘substantial meal’ clause. Once again this hits wet led pubs who did not benefit from previous support measures like a VAT reduction (which only applies on food). Pubs in Tier 3 can only open as takeaway. This covers much of the country.
• A £1000 a month grant for wet led pubs is announced. It is widely recognised this won’t even touch the rent owed by most venues. Christmas trading gets pubs through lean winter months. Anyone mentioning Dry January is tickled to death.
• Infection rates continue to rise. A new variant is discovered. Two vaccines are approved. London and the South East are given a new Tier 4 due to high rates of infection. And most pubs get to grips with the idea that they will not be opening at all over Christmas.
• And today we are mainly all moving into Tier 4, which is like full lockdown in all but name. We hope that the vaccines will make a difference to measures by Spring (when the infection rate will presumably naturally reduce to some degree anyway).

Where next?

I think that about covers it! You can appreciate the frustrations of publicans who worked so hard and spent so much to re-open safely in July & August. They were then hit with further restrictions which appear to have no scientific reasoning behind them in the autumn. And meanwhile, breweries are also struggling to stay afloat along with the other businesses who are connected to pubs. People for whom the pub might be their only social contact have now spent at least two months alone.

In the vaccine we trust. But even with this light at the end of the tunnel it may well already be much too late for some businesses. The voices of industry and the consumer continue to call for better support. CAMRA, SIBA and the BBPA have campaigned flexibly and voraciously throughout the year. Together in adversity!

Meanwhile we can all keep shopping small and local. Buy from your local brewery, vineyard, pub, deli. Let’s do our little bit to see these businesses survive. We’ll worry about the thrive in 2021.

References

• https://news.sky.com/story/coronavirus-airlines-among-businesses-given-bank-of-england-bailouts-12000568
• https://www.sharecast.com/news/news-and-announcements/fullers-to-issue-pound100m-of-commercial-paper-under-ccff–7525496.html
• https://www.theguardian.com/politics/2020/mar/17/we-cant-afford-to-shut-pms-covid-19-advice-leaves-pubs-and-shops-in-limbo
• https://www.goodbeerhunting.com/sightlines/2019/12/9/years-of-lying-to-pub-tenants-could-cost-marstons-millions