The Chancellor’s additional support measures have been described as a ‘sticking plaster’ for the sector after some operators have lost hundreds of thousands of pounds’ revenue per venue in the weeks leading up to Christmas.
While UKHospitality welcomed the “generous package”, several operators have spoken out about the inadequacy of the grants.
Des Gunewardena, chairman and CEO, D&D London, said the Chancellor’s announcement of £6k per site for a business like D&D was “wholly and shockingly inadequate”.
“Many of our larger restaurants in Central London, such as Quaglino’s,100 Wardour Street and Coq d’Argent, each lost £100k+ revenue from cancellations last week. And the same again this week,” he told MCA. “And heaven knows what’s going to happen to our New Year’s Eve.”
With each of the businesses facing +£200k loss over those two weeks, the grant “doesn’t even cover the cost of our Christmas decorations”.
He said government policies of flat grants per site crudely discriminated against the owners and staff of larger restaurants. “Quaglino’s employs 100+ staff and gets £6k. If those same 100 staff were employed by 10 smaller restaurants, we’d get £60k. Why?
“Unlike in the US and France where restaurant companies have been fully financially supported through lockdowns, the UK government continues to fail to do that.”
Immediately after the announcement Simon Longbottom, chief executive, Stonegate Group told MCA that while he was still looking over the detail, he saw it as “recognition of the difficulties faced by the sector”.
Toby Smith, chief operating officer, City Pub Company, said that like many others it was getting into the detail. “Our initial thoughts would be that whilst any support is welcome, we should not lose sight of the fact that this grant is to support hospitality businesses during December, our busiest period of the year, and we are facing a significant reduction in current trading.”
‘Too little too late’
While Martin Williams, chief executive of Gaucho and M Restaurants told the FT that with the business having had cancellations equivalent to 10,000 diners last week, Sunak’s new support for the hospitality industry was “too little, too late” and “will only act as a sticking plaster on major challenges for the sector”.
The announcement about additional local government funding and further rates support was of course welcome, the numbers being talked about are pretty small, added Gunewardena. “London needs to receive a major chunk,” he said, as it’s in the eye of the Omicron storm.
“Last week the City lost 60% of revenues, the West End 30%. In contrast residential London and the regions’ revenues held up pretty well. Funding to support businesses needs to go where it’s most needed. And that currently is central London.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown also described the additional support as “a meagre sticking plaster for many larger businesses”. Of the businesses it tracks, she said the promise of help appeared to underwhelm investors, with shares in pub chain JD Wetherspoon and Mitchell and Butlers losing some of yesterday morning’s gains, immediately after the Chancellor’s announcement.
“Wagamama owner, the Restaurant Group also drifted slightly lower, amid uncertainty about the weeks ahead and Premier Inn owner Whitbread edged down after gaining significant ground earlier in the session,” she said.
“The problem is, many companies just don’t know how long customers will stay away, or whether fresh social distancing restrictions could be imposed in the New Year. The Chancellor again said nothing could be ruled out, adding to the dark cloud of uncertainty hanging over the sector.”
