London Restaurants Fear Next Blow

(Bloomberg) -- As the U.K tightened social restrictions again to battle a flare-up of the coronavirus, restaurant owners worry that the tighter rules will deliver another crippling blow to the industry just as it begins to regain its footing.

Hospitality venues across England will have to close by 10 p.m. from Thursday and will be limited to table service only, Prime Minister Boris Johnson said Tuesday, urging people to work from home in the next six months. Chief Medical Officer Chris Whitty said data suggest the virus will spread out of control if stricter rules aren’t enforced, while acknowledging that choking off public life also bears the risk of long-term economic suffering. 

Restaurateurs say the curfew may mean it isn’t even worth opening some West End restaurants because the venues rely on weekend business amid a dearth of tourists, office workers, and theater-goers. 

“The West End is very quiet during the week,” said Des Gunewardena, chairman and chief executive of D&D London, which owns more than 40 restaurants and bars, including Quaglino’s, a glamorous restaurant in Mayfair.  “It would be a big backward step after all our efforts to bring central London back to life.”

A government-sponsored initiative so subsidize restaurant meals in August — called Eat Out to Help Out — was a great success in encouraging diners back, and following that up in September by telling people to stay home makes no sense, Gunewardena said.

He said the company’s restaurants in residential neighborhoods had done best since the easing of the lockdown and were doing as much as 80% to 90% of year-earlier sales, while those like Coq d’Argent in the City financial district were running at 65% to 70%.

Johnson chaired crisis talks on Tuesday to discuss the government’s response to the fresh outbreak. Without urgent action, the U.K. risks being put on course for 50,000 daily new cases by the middle of next month, Johnson’s top scientific adviser warned. The government also scrapped plans to allow live audiences back into sporting events next month.

Hawksmoor, a popular steak restaurant that just re-opened its 8th outlet, said the new curfew means that “you can be sure things just got a lot worse” on the financial front as venues will struggle to make the economics work with the shorter opening hours and people staying home. 

“The hospitality industry has made a Herculean effort to adjust to becoming Covid-secure,” Hawskmoor wrote in an e-mail to customers after the government rules were announced. “So we adjust and hope that you will adjust with us.”

While most City workers have not returned to their offices, there is an encouraging trend of companies scheduling breakfasts, lunches and other meetings to bring employees and customers together outside the office.

Soren Jessen, who owns 1 Lombard Street in the City and Ekte in the Bloomberg Arcade, said business has been badly hit and the challenge is to get out the message that restaurants are safe environments. 

“People are enjoying themselves in a safe way and we are selling lobster, fine wine, cocktails,” Jessen said. “For all those people sitting at home wanting to go to work, all they need is reassurance that it is safe. And the government saying ‘stay home’ is a killer for the economy.”

Jessen said the Rule of Six limiting group sizes deprives restaurants of bigger parties that are typically a major revenue stream, and that the changing rules and lingering uncertainty drives away business. It’s an experience shared by Leonid Shutov, who owns the fashionable Bob Bob Ricard in London’s Soho.

The venue doesn’t currently open for weekday lunches because the West End is so quiet. The Rule of Six was a further blow, Shutov said. Now a 10 p.m. curfew would decimate business even more because it would deprive the restaurant of  a couple of valuable hours during its peak evening service, he said. 

“On a Sunday, large tables and the private dining room can be up to 25% of our revenue, so it is a big loss for us,” Shutov said. “New restrictions are clearly having an impact on confidence generally. They haven’t shut the country down again but they are scaring everyone into staying home.”

Richard Vines is Chief Food Critic at Bloomberg. Follow him on Twitter @richardvines and Instagram @richard.vines.

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