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A third of on-trade senior executives anticipate permanent closure

Published:  06 May, 2020

A third (32%) of senior executives anticipate the need to permanently close pub, bar and restaurant sites post-Covid-19, according to the latest CGA Business Confidence Survey.

The poll of over 120 senior executives, conducted during the week beginning 20 April, found that operators remain “deeply pessimistic” about both market prospects and the future of their own businesses. 

While a third of operators expect to be permanently closing a proportion of their own sites, most anticipate a much-reduced size of market overall, with late-night venues and restaurants expected to be the hardest hit and hotels most likely to survive. 

On average, they expected to see 69% of late-night operations, 71% of restaurant, 77% of drink-led pubs, 79% of pub restaurants and 85% of hotels to be left in business, the survey revealed.

“This is undoubtedly the most important business leaders' survey we've delivered in a decade,” said Karl Chessell, director of food & retail at CGA. “At this critical juncture, how hospitality leaders plan for the recovery will be critical to the long-term success of their businesses.” 

Just 36% of leaders believe they will eventually re-open all of their sites for trading, with another third yet to decide on closures, the survey said. But almost all expect to see a much-reduced market overall in the future, with somewhere between 70% and 80% of sites across pubs, bars, restaurants, late-night venues and hotels continuing to trade.

The vast majority (81%) of operators have now started recovery planning, with most considering a range of different scenarios. But, 13% said they were still waiting for more information before starting, while 5% did not currently have the capacity to plan. 

Most businesses will be starting recovery from scratch, as only 27% of those surveyed had any sites open, either for delivery (8%), grocery and food supply to the public (4%) or for NHS or community support (14%).

When the poll was taken, most leaders assumed lockdown would be lifted in one to three months’ time, with 39% predicting between one and two months and another 29% between two and three.

A total of 96% of bosses are expecting a phased reopening for hospitality, with half believing that will be based on a number of criteria including sector, location and type of site. Only 4% expect a mass reopening. More importantly, 62% are planning for a phased reopening of their own estates. However, a sizeable 31% expect a full-scale reopening of their operations, but dictated by what the government allows. 

Two thirds of bosses believe it will take them less than two weeks to get their sites ready to trade after lockdown is lifted, including a third (33%) who think they can do it in less than a week, while another 22% anticipate a two to four week preparation period.

Losing quality staff during lockdown is a concern for 47% of bosses, with almost all businesses in the sector having furloughed nearly all staff; 83% have furloughed over 90% and 96% over 70%. 

Three quarters (76%) with furloughed staff are not topping up wages. 

When it comes to readying staff for reopening, most bosses (63%) believe teams can be prepped and trained in less than a week, with 32% saying less than three days.

At the beginning of this week, CGA research found that consumers are shunning alcoholic drinks during the Covid-19 crisis.