Brakes’ suffering turnover proves the pain of hospitality’s closure

Just like the hospitality sector itself, the businesses supplying it have been through the wringer in the past two years. If in any doubt, look no further than the major losses reported by Brakes in its most recently published set of accounts. Turnover is down a whopping 18.2%.

The numbers cover the year to June 2020 and so include the period when the UK went into total lockdown at the beginning of the Covid-19 pandemic, though not the subsequent ups and downs that came with soaring summer demand, the Eat Out To Help Out scheme, the scotch egg saga, and then ultimately the second and third lockdowns. Still, Brakes remains defiant. Communications director Matt Stewart points to the company’s “programme of improvement and investment in our infrastructure”, from which it expects to see more benefits in the coming year.

“We expect the resilience of hospitality and foodservice to shine through. Operators have continually adapted to changing market conditions, and proven themselves highly capable at providing consumers with what they want. We expect that vibrancy to continue.”

But Brakes was not alone in its suffering. The pandemic has seen foodservice specialists large and small haemorrhaging sales. The impact on this year’s Big 30 ranking is stark. Reynolds Catering Supplies dropped from 18th place to 29th as sales fell 58.4%. Enotria Winecellars, a supplier mainly to pubs and restaurants, fell six places to 26th with sales down 46.3%. Meanwhile, meat wholesaler Fairfax Meadow dropped off the ranking entirely, having been 22nd last year. Its sales fell by £91.4m to £69.5m in the year to 31 December 2020.

FWD CEO James Bielby explains a saving grace for the sector and its suppliers is that consumer demand for hospitality has remained strong – it was just a victim of covid rules and regulations. As these eased, more and more of the lost business has returned, though wholesalers are nonetheless having to cope with a serious lack of growth.

“If you look at the picture now compared to 2019, we are at around 80% of foodservice sales,” says Bielby. “We should reach 90% this year. And it’s predicted that the market will be 1% ahead of pre-pandemic levels in 2023. So these businesses will have lost four years’ worth of growth.”

The other positive to cling on to is that wholesalers can now finally apply for a share of the £1.5bn Covid relief funding from government first promised in March 2021. Some wholesalers are already understood to have received grants of up to £400,000.