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Hospitality needs customers if it's to stop going hungry

Published:  28 July, 2020

The hospitality sector is beginning to reopen, but it needs many more customers if its future is to be secured. By Andrew Catchpole

How the dining-out experience has changed. Pitch up to Pop Brixton and this normally thriving south London street-food boxpark is half full, and at a weekend lunchtime. Safety-wise, it ticks all the boxes. Temperature checked at the door, personal info delivered via a scanned QR code, no leaving the carefully distanced table once seated, and all ordering via a collective app from the handful of vendors that have now opened, rather than a ruck at each food bar.

Well done to yet another food venue visited by Harpers that has successfully embraced all the measures for a safe return to eating out. But, while still enjoyable, partly thanks to fantastic and clearly well-drilled staff, it certainly isn’t the same experience as it was ‘before’. You can leave ideas of carefree abandon at the door.

The catch is that the on-trade and wider hospitality sector needs custom as never before. Well before the official on-trade shutdown on 20 March custom had already begun to bleed away. Then it stopped dead with the full shutdown.

And now, able to open doors once more, many businesses are struggling to build trade back up, with those in city centres, still devoid of most office workers and tourists, hit particularly hard – if they have opened at all.

There are, however, some optimistic signs that the UK’s pub, bar and restaurant sectors are getting back on their feet – bruised and financially stressed, yes, while working flat out to fold stringent new safety protocols into the day-to-day operation, but fighting to find a way to work around and with the ‘new norm’.

However, the most recent ‘special edition’ in CGA and UK Hospitality’s Future Shock series of reports highlights quite how difficult it is proving for the sector to claw back its once world envy-inducing vibrancy.

The latest data shows the hospitality sector accounted for a third of the total drop in UK GDP during April and May.

Fast forward to July’s new dawn and a deeply worrying one in six (16%) of industry leaders “are optimistic about the prospects of the market in the next 12 months”, says that report.

Moreover, the figures for those who say they are prepared to venture out once more are worryingly low. The report found 23% of consumers are returning to venues “with caution”, while 33% would only do so if they were sure that “added precautions were in place”.

While there has been some sustained rebound, CGA’s most recent Coffer Peach Business Tracker data, released 17 July, found that, while 55% of on-trade had reopened in England in the first week after lockdown, sales were down 39.8% compared with last year.

Bars fared worst, being 42.9% down on a like-for-like basis, with group-owned restaurants down 40.0%, while pubs saw sales drop 39.3% on the same week in 2019.

Conversely, more pubs felt able to open their doors than restaurants and bars, with 70% of managed pubs and pub restaurants trading against just 17% of restaurants and 42% of bars opening for business. A major constraining factor, of course, is the restriction of cover numbers at most venues because of social distancing rules.

Recognising the scale of the challenge ahead, which has seen high-profile operators such as Jonathan Downey announce the coming permanent reclosure of both his seminal Milk & Honey bar and street food court Dinerama, CGA director of retail and food Karl Chessell stresses that building consumer confidence is critical.

“The past four months have been the most difficult period of trading that most of us in the industry have ever seen. The pandemic caused a sudden and dramatic downturn in sales and had a seismic effect on consumer behaviour, and the big question now is how quickly the market can recover,” says Chessell.

On a more upbeat note, he adds that so long as the industry has the backing of consumers, and with further government support, “businesses can not just survive the pandemic but thrive in the happier times that lie ahead”.

Kate Nicholls, chief executive of UK Hospitality, agrees more government support is necessary to keep the sector afloat.

“There is still a huge amount of graft to be done if we are to make it through this crisis in one piece, but if any sector can emerge stronger it is hospitality.

“We have pushed – and will continue to push – hard to persuade UK governments to provide as much support as possible to keep businesses afloat and jobs secure, and have done everything we can to help pave the way for recovery. We have all faced up to some difficult truths and learned some valuable lessons,” she adds.

There are signs that more cautious consumers are – gradually – easing back into dining and drinking out. Recent research from information business NPD Group suggested weekly spend for the week ending 12 July across the dining sector had risen to 50% of normal levels. Dinner showed strongest signs of recovery at 64%, followed by weekends at 57% of former levels.

However, this remains far too low to sustain the industry and higher turnout is needed fast for many operators to pull through. Food delivery remains high, 60% above pre-pandemic levels, providing some sustenance to those offering delivery menus, but also suggesting the scale of numbers still remaining at home. And, from the drinks perspective, on-trade wet sales are suffering as people buy in booze from the off-trade.

A final piece of this somewhat gloomy jigsaw finds 5% of adults in England failing to show after making a reservation, with a further 5% cancelling at short notice, meaning around one in six reservations go unfulfilled. This has seen chefs such as Tom Kerridge imploring people not to endanger jobs and livelihoods.

Distilled down to its simplest message, we all need to start going out again – and now – if we want to keep our favourite restaurants, pubs and bars.