U.K. Hospitality Industry Sales Slump 87% as Coronavirus Lockdown Bites
(Bloomberg) -- Sales in the U.K. hospitality industry slumped 87% in the second quarter, hurt by the lockdown for the coronavirus pandemic, and the outlook is no less troubling, according to an industry group.
Revenue from April through June totaled £4.6 billion ($5.9 billion), compared with £34.2 billion a year earlier, the New Quarterly Tracker from the UKHospitality trade association and research firm CGA says. Given what the industry group called a “catastrophic collapse” in revenue, businesses will need “extensive and sustained support over the rest of 2020 and beyond,” it said.
Prime Minister Boris Johnson, who himself battled with a coronavirus infection, advised Britons to avoid public spaces such as bars and restaurants on March 16, and a full lockdown kicked in on March 23. It was partially lifted on July 4.
Businesses are gradually reopening across the country, and the government is now seeking to support them with measures such as the Eat Out to Help Out Scheme, whereby diners can get a 50% discount on food up to the value of £10. But with continuing concerns about the virus, and hesitancy to use public transport, recovery appears likely to be slow.
“These latest figures highlight how precarious the present situation is,” said Kate Nicholls, the chief executive of UKHospitality, which represents more than 700 companies and 65,000 venues employing 3.2 million people. “We are only on the very first steps in a long recovery. These figures substantiate our message that businesses still need support from government if we want to avoid more business failures and job losses.”
In the short term, the industry’s woes can be positive for diners. Only yesterday, Hawksmoor — an up-market steakhouse chain — announced it will serve a 300 gram (10.6 oz) rump & chips dish with sauce for £20 as part of Eat Out to Help Out, meaning it’s £10 for diners. That’s a bargain for London. Also, tables at in-demand restaurants like The Wolseley, on Piccadilly, may be easier to book than usual.
But other popular and respected restaurants are giving up, including Le Caprice and the Ledbury in London. And many more closures are likely in coming months as restaurateurs face hefty bills for accumulated rent. They are calling for a nine-month #NationalTimeOut rent-free period for hospitality businesses.
The UKH Tracker combines data from all segments of hospitality. It says the industry contributed £133.5 billion to the economy in 2019, but the rolling annual value has now fallen below £100 billion, with 12-month sales to the end of June totaling £97.2 billion.
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