Dominic Walsh: On not-so-Super Saturday and the pain that’s yet to come

If anyone thought that July 4 would bring down the curtain on the 15-week coronavirus purdah, they were soon disabused of the notion. Super Saturday was – like the weather – something of a damp squib. While some of the big pub companies opened as many as 80% to 85% of their estates on day one, research by CGA suggests that only 45% of hostelries opened their doors on Independence Day.

As for trading, again predictions of a spot of post-lockdown exuberance proved, with one or two exceptions, wide of the mark, with the Coffer Peach Business Tracker suggesting that sales on the opening weekend reached only 55% of the level of trading achieved over the same weekend last year.

One CEO of a leading quoted pub company texted me first thing on the Sunday morning to tell me: “Bookings up, but walk-ins down. I think we will be slightly down. As expected, and very few problems reported.” Which sounds not too bad. Except that after taking into account the combination of reduced capacity and the cost of keeping customers and employees safe, profitability will have proved elusive.

Of course, for most the first weekend will have been all about getting the doors open, testing new ways of working and trying to ensure that customers feel they’re visiting a pub rather than a hospital intensive care unit manned by PPE-laden employees who look more like Darth Vader than a member of the hospitality industry. And counting their blessings that they didn’t have to kickstart things with social distancing of 2m, which really would have made opening pointless.

Those who decided not to rush into opening as many pubs as possible as soon as possible did so for perfectly sensible reasons. Patrick Dardis, the Young’s chief executive, decided to wait until July 20 to open the group’s 276 pubs. “It gives us time to ensure we are fully prepared and have all the relevant measures in place to welcome back our customers and teams safely.” Simon Emeny, his counterpart at Fuller’s, only opened 27 of its 215 managed pubs on the first day to enable the group to “learn and adapt”, adding: “At this stage it’s about having a safe and enjoyable experience, not about how many pints are sold.”

Of course, getting the doors open and business ticking along again is just the beginning of the battle. Giggling Squid co-founder Andy Laurillard posited the theory that there are three waves (or should that be tentacles?) to the Covid-19 crisis and that so far we’ve only navigated the first of those. The first wave was shutting up shop and battening down the hatches on cash. Wave 2 is lifting the shutters and taking on the bucket-load of costs that had been parked, including rent, and trying to survive without many of the government support mechanisms that were available during lockdown. Then wave 3 – the toughest of all – will be dealing with the worst economic recession in a century, although those still standing after the first two might find themselves facing sharply reduced competition and with half a chance of making it through the storm to calmer – and more profitable – waters.

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When Rishi Sunak, the undoubtedly impressive chancellor, said he was sorry he couldn’t save every job, it felt like a genuine statement. After all, he is the man who managed to make lockdown considerably more manageable for employers and employees alike by introducing a furlough scheme that one million businesses across all sector have tapped into.

Furloughing has definitely helped myriad hospitality businesses but for too many unfortunately it simply delayed the inevitable. Adding together the biggest jobs losses announced since the end of March, the number of casual dining casualties comes to about 7,500. Add in the 5,000 UK redundancies at SSP’s UK operations, up to 1,600 at Burger King plus the 1,000-plus at Pret A Manger and suddenly you’re up above 15,000. And that’s not counting the many companies who have flown below the media radar screen or have yet to declare their hands on jobs or are simply waiting for the corporate undertakers to come in and do it for them.

Unfortunately, it feels as though the casual dining sector, in particular, has much more pain to suffer. Companies from Gourmet Burger Kitchen, to Azzurri Group, Prezzo and Byron are being advised on sale processes or other restructuring options that are likely to result in some restaurant closures and therefore job losses.

One advisor who’s been kept busy by the sector told me that the possible closures and job losses at Burger King could be just the tip of the iceberg in the fast food sector, suggesting that the likes of KFC, Pizza Hut and Subway and many others besides may have to trim their estates.

Alasdair Murdoch, the Burger King UK chief executive, was in no doubt that the Home of the Whopper was not alone among its peers in being hit: “It’s not just us,” he insisted. “I think this applies to everyone out there in our industry.”

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Can I belatedly add my voice to the many who have heaped praise on Kate Nicholls and her team at UKHospitality for the way they have helped steer the industry through the coronavirus crisis. How she finds enough hours in the day and days in the week to deal with the myriad issues I simply cannot fathom. The complexities of the various government loans, furlough measures and reopening protocols have bamboozled many of us, but Kate is always able to break them down into understandable chunks, alleviating at least some of the stress suffered by those in the industry trying desperately to save their businesses.

A special mention in despatches also to Emma McClarkin, of the British Beer & Pub Association and Jonathan Downey of Hospitality Union for helping to interpret and explain the many twists and turns of the past 16 weeks, bringing clarity where there was obscurity. But keep going guys. The job isn’t done yet: there are still two waves to go!