Roadmap out of lockdown: the industry reacts

James Bielby, CEO, Federation of Wholesale Distributors

“Wholesalers have asked the prime minister for clarity and confidence and he’s partly delivered the first of those. However our members’ experience of previous lockdowns and u-turns means they’ll be cautious about investing ahead of each scheduled opening date. Those who distribute to the hospitality sector can’t afford to foot the bill yet again for government dithering. 

“We saw several times last year how short-notice changes disproportionately impact wholesalers, who have to stock up in advance of demand. What we need from government is at least two weeks’ notice if it has to deviate from the roadmap at any stage, or if that’s not possible, a consideration for the cost of the excess stock that will go to waste as a result of the late changes.

“The roadmap is a route out but it’s not the journey itself. With hospitality not fully open until June at the earliest, the drain on foodservice wholesalers’ cash reserves will continue, and they are already nearly exhausted. They need cash to stock up, and they need it soon, starting with an announcement of support in next week’s budget.

“The planned opening of pubs and restaurants for outside service on 12 April means the hospitality sector will be looking to stock up just as border controls on products coming from the EU are introduced on 1 April. Extra demand plus extra bureaucracy may mean delays, so there could be implications for availability of fresh product at this point.”

Helen Dickinson, chief executive, British Retail Consortium

“We welcome the additional clarity provided by the prime minister. While we are encouraged by a plan for non-essential stores to reopen, the heavy impact of the pandemic means some may never be able to. The cost of lost sales to non-food stores during lockdown is now over £22bn and counting. Every day that a shop remains closed increases the chances that it will never open again - costing jobs and damaging local communities.

“Non-essential shops are ready to reopen and have been investing hundreds of millions on making themselves Covid-secure. Government should remain flexible and allow non-essential retail to reopen as soon as the data suggests it is safe to do so. Until it is permitted, retailers will need continued support from Government. We welcome the PM’s call ‘not to pull the rug out’ from under businesses. To this end, the government must act on three vital issues – rents, rates and grants.

“To avoid further job losses and permanent job closures, the chancellor must announce a targeted business rates relief from April and extend the moratorium on debt enforcement, as well as removing state aid caps on Covid business grants. This would relieve struggling businesses of bills they cannot currently pay and allow them to trade their way to recovery.”

Vicky Hernandez, partner, retail lawyers Royds Withy King

“Retailers have been one of the hardest-hit business sectors and have eagerly been awaiting this moment. It is, however, just the starting point for a major shift in the relationship retail tenants have with their landlords.

“The government’s roadmap is likely to result in the lifting of the moratorium on winding-up petitions and there will undoubtedly follow a flurry of activity with landlords seeking to recoup lost rent.

“There are, however, an equally large number of retail tenants that have cash to pay rents yet have heard nothing from their landlords. They are unlikely to simply want to hand it over. Retail tenants have the upper hand and will use that to renegotiate rents.

“Take, for example, shopping centres that have lost anchor tenants following the collapse of Debenhams, Top Shop, Top Man, Evans, Burton, Dorothy Perkins, Miss Selfridge. Footfall in those centres is likely to fall and other retailers will be questioning pre-Covid rent agreements.

“Destination high streets may also look very different, as wealthy overseas visitors continue to face travel restrictions. The rents on flagship stores can be extremely high and are unlikely to be sustainable.

“Parts of the retail landscape have held up well and will continue to do so. Discount and outlet stores and malls remain popular and will present opportunities for landlords. Retailers are innovative, exploring new ways to reimagine stores through new products and technology.

“The retail landscape has changed and will continue to do so. We can expect an exciting if very different future.” 

Greg Johnson, research analyst, Shore Capital

“Yesterday, the prime minister announced the UK’s roadmap out of lockdown. Although, unsurprisingly given media reports, the timeframe was somewhat extended, we believe it is important for the market to now finally have some visibility over the timing of re-opening (albeit this timing could clearly slip if the data deteriorates) and we believe it is near enough in the future, with a potential return to some form of normality in the second half of 2021, to support our positive view on UK hospitality.

“To us, the key points to the roadmap for the UK Food & Beverage channel was the removal of the substantive meal requirement and no future curfews, coupled with the opening of the majority of indoor leisure and hospitality from 17 May.

“Compared to our concerns ahead of the publication of the roadmap we see the announcement as more positive for pubs than restaurants and favourable to other indoor leisure activities where reopening was materially delayed last year, such as bowling and casinos.”

Paddy Lillis, general secretary, Usdaw

“The reopening of non-essential stores offers a lifeline for many retailers. That is good news in terms of helping to safeguard jobs, but the virus is still out there. It is essential that the tests set out by the government before reopening are followed, so that shops only reopen when the data suggests that it will be safe.

“When they do reopen, we expect employers to maintain necessary safety measures, including two metre distancing, and call on customers to follow the rules and respect staff. Regrettably, throughout this appalling pandemic, incidents of abuse towards shopworkers doubled. It should never be just a part of the job and shopworkers must be respected.

“Retail staff are working with the public every day and are not only facing increased abuse, but also a higher chance of catching Covid-19. That needs to be taken into account when deciding priority lists for vaccines. The government must prioritise vulnerable occupations in the second phase of the vaccine rollout, reflecting the risks they face.”

Hugo Mahoney, CEO, Brakes

“We welcome the notice that the prime minister has given for the reopening of schools, which will allow wholesalers and their suppliers sufficient time to restock and be ready for what looks like a complete school remobilisation on 8 March. We have also been working closely with the Welsh and Scottish administrations to reopen schools to their timetables.

“However, despite the positivity on the reduction in Covid transmission, vaccination successes and mass testing kit availability, it is extremely frustrating that the hospitality industry continues to be at the back of the queue for full reopening. While we understand and fully support the need to ensure people’s safety and wellbeing and to protect the NHS, we urge government to introduce a data-driven explanation for why hospitality isn’t yet reopening. Hospitality businesses, wholesalers and their suppliers across the country have invested heavily in creating appropriate working practices and customer environments that safeguard the health and wellbeing of both staff and customers. This successful self-regulation by a highly responsible industry needs to be recognised and supported.

“We call on government to review its decision not to reopen hospitality earlier, before irrevocable harm is done to businesses which are a vital part of the fabric of life in Britain, and the country’s third largest source of jobs.”  

Emma McClarkin, chief executive, British Beer & Pub Association

“Today we were looking for a clear roadmap out of lockdown for our sector and an indication of the dates when we could fully reopen and operate viably, again.  

“Whilst we have received earliest possible dates for reopening, our sector will continue to face severe restrictions that limit their business and stop them from being viable. The reality is debt is mounting and many pubs simply won’t be able to hold out to April or May and will close for good before any door gets open.

“Outdoor service only from 12 April will likely mean that three in five pubs across the UK will remain closed. That’s 29,000 pubs still not able to open either because they don’t have any outdoor space or simply because they will not be commercially sustainable. Because of this, the majority of pubs will not reopen until 17 May at the earliest, meaning that they will have been closed for almost eight months.

“It will mean just 17% of our pubs’ capacity will open from April. That will cost our sector £1.5 billion. 

“The government must now plug that £1.5 billion hole for our sector with vital support in the budget next week if thousands of pubs are now to survive.  

“The prime minister said he will not pull the rug out and do whatever it takes. We will hold both him and the chancellor to this. Our sector will need more grant support until pubs can fully reopen, as well as furlough extended to save jobs for pubs not able to open in April. Even when they open in May, pubs will need help on their long road to recovery through an extension of the VAT cut and business rates relief – as well as a beer duty cut. The recovery will take much longer than expected and we will need this support for 12 to 24 months. This support will need to be extended to brewers and supply chain partners who are relying on the timely reopening of pubs as they depend on them for trade. 

“It is imperative that pubs who do try to reopen with outdoor service only are also offered support. Their business will not only be severely restricted by reduced capacity, but also the highly unreliable British weather. 

“The government must also stick to 21 June as the end date for social distancing restrictions. This will increased pubs’ economic viability in being able to make good trade for the rest of the year and give the hospitality sector some much needed certainty.

“Returning to work and offices also remains unclear, which is of huge concern for those pubs reliant on such trade. We need the government to clarify and encourage a timely return to return to work and help boost consumer confidence to re-emerge. 

“Without these measures, thousands of pubs will be at risk of closing for good, along with hundreds of thousands of jobs and livelihoods being lost forever right at the last hurdle of this crisis. 

“Last year we saw almost 2,000 pubs close for good – that’s five pubs every day closed forever. We cannot let this happen again in 2021. Local pubs play a vital community role by providing wonderful and regulated places where we can safely meet with our families and friends – something we are all longing to do again soon.”  

Dawood Pervez, managing director, Bestway Wholesale

“There are a number of key factors to take into account, not least the timing of how lockdown restrictions will be eased. The next three to six months will be very important to independent retailers and we would look to reassure our customers that we are here to support them every step of the way.

“Firstly, whilst regulations are easing around lockdown, it is clearly going to be a gradual easement with some unknowns along the way. It is not looking likely that pubs will open before Easter, and when they do - it means that people will likely be sitting, or gathering outside, in order to remain distanced, which means by its very nature there will be limitations. Yes, people may be meeting in parks and outside which will help restore some life to our city and town centres which means more footfall, and more opportunity for retailers.  

“With schools opening on 8 March, this will also mean increased ‘feet on the street’ in respect of impulse purchases (which have taken a big hit during the pandemic and throughout lockdown), with increased consumption of food to go, including fruit, snacks, soft drinks and confectionery. That has to be good for the independent retailer serving their local communities.

“The early indicators are that people will be steadily returning to the workplace – not everyone will continue to work from home.  All the above reasons mean that for convenience retailers, there’s a lot to play for over the next three months.  Don’t let’s forget we are then into the Euros (football) where there is likely to be increased levels of home viewing which means an increase in ‘take home packs’ and we anticipate that consumers will want to collect premium beers, wine and ciders from their local stores.  For many consumers, there will inevitably be an abundance of caution in how they re-engage socially and professionally meaning their community stores will remain a real lifeline.”

 

Ian Wright, chief executive, FDF

“It is disappointing but wholly expected that the prime minister’s roadmap shows no signs of taking account of any input from business. For a great many of the food and drink manufacturers supplying the hospitality and food service sectors, a return to ‘business as usual’ seems an awful long way off. As such, it is only correct that the chancellor outlines significant extensions to the furlough and credit insurance schemes as part of his budget announcement next week.

“The food and drink industry is the UK’s largest manufacturing sector. It will therefore be key to the country’s economic recovery, with a footprint in every region. Now is the time for government to provide additional support to ensure those businesses most at risk can play their part in putting the country back on its feet.”