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Mon 23rd Nov 2020 - Sector bosses label stricter curbs ‘catastrophic’, Leon draws up CVA proposals |
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Sector bosses label stricter curbs on hospitality as part of strengthened tier system as ‘catastrophic’: Sector bosses have labelled the stricter curbs on hospitality as part of a strengthened tier system as “catastrophic” for the industry. Under the new tier system, which will be introduced when the national lockdown is lifted next week, hospitality businesses in tier three will only be allowed to offer delivery or takeaway, while those in tier two will only be able to serve alcohol with “substantial meals”. The 10pm curfew has been scrapped, and instead last orders will be called at 10pm with an hour’s drinking-up time before a new curfew time of 11pm. Cinemas are also allowed to reopen in tiers one and two while a maximum of 4,000 fans will be allowed at outdoor events in the lowest-risk areas. But the measures are significantly tougher than under the previous tier system. Under the old tiers, pubs in tier three could stay open if they could operate as restaurants, while in tier two they could open as normal but customers could not mix indoors with anyone from another household. Prime minister Boris Johnson told MPs: “We must get through winter without the virus spreading out of control. Our tier system needs to be made tougher and I’m sorry for the hardship it will cause those businesses.” However, UKHospitality chief executive Kate Nicholls tweeted: “Prime minister confirms press reports over the weekend – hospitality remains in lockdown or severe restrictions while all else opens up. Millions will go from lockdown into lockdown and millions in hospitality face real threat to businesses and jobs. Seems prime minister continues to believe hospitality is a weak link despite the fact we’ve been closed for a month, we’re in restrictions with no household mixing and curfew for a month before that and many parts of the north west, north east and Midlands have had hospitality restrictions since August. Prime minister says lockdown measures will be redundant by spring. Without further support, many of our pubs, restaurants, hotels, indoor leisure and event spaces will be lost as will jobs across the supply chain. We share the hope and ask that he supports us so we can help deliver recovery. Given many hundreds of businesses are now placed in jeopardy and millions of jobs may be lost in hospitality, leisure and supply chain we urgently need government to set out clearly the evidence to justify each restriction and explain how it will impact on the key health metrics. We need to understand how, when and how frequently this is reviewed; how businesses may be brought out of restrictions and down the tiers; what steps will be taken to address the spread of infections in the community and open parts of the economy. We also need commitments that - having been forced to close to allow others to open - there will be no return to closure for hospitality post Christmas; that our businesses will be included in Christmas relaxations and that restrictions will be eased when vaccine in use.” She told ITV’s Good Morning Britain earlier: “It seems the hospitality sector is being made to pay the price for the rest of the economy opening up before Christmas.” British Beer & Pub Association chief executive Emma McClarkin said: “Our sector has been singled out by these new measures which unfairly target pubs. The additional restrictions will destroy our sector if they go ahead as proposed. While the review of curfew is overdue the relaxation of the 10pm curfew is meaningless if most pubs are rendered unviable or forced to close under tiers two and three. If these tighter tier restrictions are forced upon us, far more Government financial support will be needed to avoid the resulting carnage. In tier two alone, the new restrictions will mean 90% of pubs will be unviable and will only be able to operate at a loss. In tier three, no pub is viable if restricted to takeaway only. This will also mean our brewing businesses will be hugely damaged too. The current grants are not even enough to cover fixed costs in a pub, and now must compensate for the revenue pubs and breweries will lose as a result of these additional restrictions. Without an enhanced grants package of support for pubs and brewers thousands of businesses are doomed to fail, destroying thousands of livelihoods and communities across the UK.” British institute of Innkeeping chief executive Steve Alton said: “With such a reduction in footfall for our venues, profitability will be wiped out in the month where so many pubs rely on higher incomes to see them through the winter and into the spring. These tougher restrictions mean that despite furlough continuing until March, thousands of businesses will be left unable to survive until they are allowed to reopen and trade more freely or provided with realistic levels of business support.” Sacha Lord, Greater Manchester’s night time economy adviser, said: “I have heard reports 94% of pubs in tier three areas will go under by spring and while this may seem excessive to some, it is no exaggeration. It is clear the ever-increasing debt from rents, rates and bills will be too much for the majority, especially the independent operators that cannot lean on parent companies. Operators across Greater Manchester and the UK have spent several millions on making their venues covid-secure, following the government’s own guidelines, and I can only view these new regulations as a knife in the back and to the heart of the sector. Operators now face business ruin and the finalisation of redundancy procedures, and for a sector where 21% of full-time workers and 53% of part-time workers are already paid under the ‘living wage’, many workers now face an increased risk of poverty. On Thursday (26 November), the government will vote on these proposed measures. We urge MPs on both sides to do the right thing and vote against the destruction of the nation’s most-loved sector.” London Union founder Jonathan Downey tweeted: “Hospitality jobs and livelihoods are being sacrificed for everything else.” A decision on what tier an area will be placed into will be made on Thursday after the latest seven-day data is announced. Johnson said: “We expect more regions will fall at least temporary into higher tiers than before.”
Leon draws up proposals for a CVA: Natural fast food brand Leon is to become the latest sector operator to undergo a restructure. Sky News has learnt the John Vincent-led business is drawing up proposals for a company voluntary arrangement (CVA), which is likely to involve seeking permanent rent cuts from landlords. Leon appointed consultancy firm Quantuma in early June to help it engage with its landlords and push to change to a turnover-based rent model. It is thought the business has been looking to follow peer Pret A Manger in pushing to change to a turnover-based rent model. The implications for jobs and restaurant closures were said to be unclear at the current time. Speaking to Propel in July, Vincent told Propel that Leon had agreed new rental terms with many of its landlords but “given the uncertainty of what is going on”, it needed to “keep all options open”. Vincent was responding to a question from Propel regarding whether the company may have to explore a restructure. Vincent told Propel: “Quantuma is principally employed to work on getting to a win-win solution with landlords. Many have already agreed new terms and we are constructively working with the remainder ahead of the critical end of September rent quarter date. Given the uncertainty of what’s going on, we need to keep all options open but anticipate most landlords will come to the table.” It is thought the second lockdown and the latest directive to work from home has further impacted the group’s sales. The company operates circa 70 sites across the UK, with the majority based in London, plus sites in the US, Norway, Holland, Ireland and Switzerland. One source said Leon’s need to explore a CVA underlined how deep the industry crisis had become. “If a company as good as that needs a CVA, it shows how badly the industry has been affected,” the industry insider said.
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