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02 December 2021

Opinion from Adrian Leopard & Co

News impacting business from Adrian Leopard & Company - Insolvency Practioners & Mediators

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Pubs, restaurants and take-aways – who is winning?
Adrian Leopard 195

Pubs, restaurants and take-aways – who is winning?

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All these jobs which cannot be filled and yet there has been a huge increase in take-aways. It doesn’t quite stack up

You could be forgiven for thinking that the catering trade does not know where it is going. You would probably be right!

What is a certainty is that things are unlikely to get back just as they were pre-covid. With all the shutdowns and lockdowns over the past year or more, irreversible changes have set in. What does that mean exactly?

Well firstly we hear continuously that the catering trade is in trouble, that even now those places which are open are not making a profit and that if the relaxation of restrictions which is anticipated towards the end of June is delayed, many more businesses will go out of business. Indeed many have already ceased to trade for good and as a result many people have lost and will continue to lose their jobs.

Today, however, we hear that the hospitality trade reckons it has 188000 job vacancies which it cannot fill. How is this explained? It sounds like one of those lateral thinking conundrums we hear from time to time. But no, there appears to be no correlation between the two or indeed explanation. Catering businesses are complaining that there is a shortage of manpower because of Brexit and the resultant new rules on labour coming in from overseas.

But lots of businesses have closed down and more are expected not to open when restrictions are lifted. So what of the employees of those businesses? Have they found jobs elsewhere? Are they leaving the catering trade?

Then there is a material change in the trade itself which will be far more interesting to the general public, namely that take-aways and deliveries have grown at a huge rate and are now expected to remain a much more significant part of business catering in the future. Quite simply, businesses have stepped up to the challenge of keeping going with new ideas and they have succeeded in persuading the public that take-away food is more than just “a chippy tea”, “an Indian”, “a Chinese” or “a pizza”! Even though pubs opened for outside service in April, catering for home-eating increased by a staggering 345% in April compared with April 2019.

It looks like the jury has decided on this and the expectation is that this will continue. After all, generally the food is cheaper and you can buy your alcohol at sensible supermarket prices and you don’t even have to worry and about drinking and driving. It does have a lot to commend it.

But this too then must have an effect on the requirement for staff. If you are now sending a larger percentage of your food product off-site, then that means you are going to have less clients eating in and therefore a need for fewer staff.

At the moment it is by no means certain that the hospitality industry will have restrictions removed at the end of June; with 43% of the population saying that they think the removal of restrictions should be delayed, there must be a doubt as to what will happen and with the Indian variant getting a serious grip, this is looking like making things more difficult. The increase in new cases over the past seven days is 23% and very sadly deaths are up 44%. It is interesting to see how these increases have started after restrictions were eased and people are bound to see a connection. Mind you, sights like we have seen in the past 24 hours in Portugal and the UK over the football match can hardly engender confidence that people are taking care still to self distance.

There will always be those in our society who will want to take care and for that reason it seems that take-away meals are likely to remain a popular option for a long time to come, and may be here we see a long term sea-change in our society.

So what price restaurants and pubs now? Anyone deciding to invest in such a business must certainly take into account the “lack of confidence” factor but we shall only start to know what this is going to be like once the restrictions are lifted, whether at the end of June or later.

Adrian Leopard 30-05-21

Photo Magnus Olin

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