How are operators planning for post-lockdown?

Loungers CEO Nick Collins, Chestnut founder Philip Turner and Black Sheep Brewery chairman Andy Slee told delegates of the first digital MA500 of their predictions for post-lockdown.

Collins outlined Loungers’ plans for when pubs are allowed to open their doors again, after weeks of closure.

He said: “We are guessing, at the moment, but trying to focus on things that are likely. [We are] looking at lots of additional hygiene procedures that we will need to put into place to protect our teams and our customers.

“We are spending quite a bit of time looking at gaps between tables and the impact social distancing might have on our capacity.

“Then looking at the different day-parts we trade and to what extent [this may change]. Pre-lockdown, we were at 100% capacity in those different day-parts, One of the areas where we might be a bit fortunate, as a business, is we do trade from 9am through to 11 or 12 at night so there are lots of times where we are generating revenue and the sites aren’t necessarily 100% full.”

Collins went on to highlight how customer behaviour may change and how the business will adapt for this.

He added: “We are looking at ways in which the consumer might, perhaps evolve, change and how we can best change anything within our business to look after them better.

“One of the things we have looked at in the past is order-at-table apps and decided they weren’t something we wanted to introduce but now we are looking at that a little bit more closely.”

He also explained how he is looking into the business and working out how best to prepare for reopening.

Collins said: “We are also looking at the menu and supply chain. When we come to reopen, we will be reopening with a fairly significant reduced menu for two reasons.

“Firstly, we expect the supply chain to be compromised on reopening. I don’t think we can just expect all our suppliers to flick a switch and for everything to go back to normal so we are trying to understand the impact that could have on our ability to produce great food and drinks.

“We are also looking at it from a back-of-house operational point of view and understanding how we can operate our kitchens within social distancing to the extent that is possible, and understanding if a reduced menu will help us achieve that.

“We are making sure we are staying really engaged with our teams, doing lots of fun stuff with them but also answering lots of questions, reassuring them, regularly communicating with them on what’s happening within the business, how we see the future and making sure they are all all right at the end of the day.”

Widespread concern

Chestnut founder Philip Turner went into detail about his worries on Government support stopping when reopening takes place.

He said: “The widespread concern across the industry is going to be the nightmare cocktail of being able to reopen with social distancing restrictions and the end of some form of furlough scheme.

“It’s well documented that many of us operate on tight margins, very few of us operate to the full capacity of our buildings and so consequently, there is a break-even point that we want to achieve.

“It’s very difficult to understand and guess what the social distancing restrictions are going to be but one impact of that, and this is not discussing human behaviour and the likelihood it will change in the short term, but to see a significant fall in revenue.

“That combined with the end of furlough will force every operator to think about what they don’t want to think about, which is letting people go – the opposite of what the furlough scheme has been about.

“It has been to save jobs, it has not been there to warehouse people’s jobs, only to see those jobs disappear. That’s number one concern.”

Turner also said the impact on trade throughout the summer months will continue into the colder season.

He added: “As time goes on, it feels the likelihood of summer trade is going to diminish. We are a seasonal business. There are some cold, dark, wet months, particularly in October and November.

“There’s a great fear that without the benefit of the summer trade, winter is going to be very, very difficult from a cash-flow perspective.

“While we are going through a period at the moment where people are dealing with financial stress, one of the consequences of opening late summer or early autumn will be the thought that we won’t have that summer cash cushion to help facilitate us through the winter months.

“I suspect this is going to trigger a lot of discussion around the further postponement of VAT payments, which will be due first payment of next year, pushing that out to the second quarter as well as some form of efforts to try and reduce maybe VAT liabilities when we do reopen along with some kind of phasing of the furlough scheme.”

Successful initiatives

Black Sheep Brewery chairman Andy Slee gave his perspective on how the pandemic is impacting the business’s five pubs and beer arm.

He said: “The challenge we faced was having two thirds of our market switched off overnight.

“We have the vast majority of staff furloughed, local authority grants are processed and are in the middle of a Coronavirus Business Interruption Loan Scheme application.

“We have accelerated our sales into supermarkets and off-trade, and have ramped up our direct sales to consumers online via our websites massively.

“But what has been really successful is direct delivery to homes in and around the North Yorkshire Dales.”

However, Slee also called for the trade to call on the Government for further help and support amid the pandemic.

He said: “We need to be really clearly joined up and not be in any way bashful about going to Government and asking for our industry to protect 1m livelihoods and, ultimately, resuscitate UK hospitality, which is the pride of the world.

“Things like restart loans, grants, innovation grants. Inevitably, the situation is going to lead to us having to work differently and reaching consumers differently.

“We should not be afraid of calling for big calls like the abolishment of VAT for a period of time, it was done after the banking crisis, there’s no reason why it shouldn’t be done again.

“We have paid more than our fair share over recent years and it’s time for the rest of society to help us out.”

Looking to the future, Slee reflected on his previous experience in the trade and how recent times have led to him learning more than ever before.

He said: “Black Sheep is learning all the time, I have been in the industry for more than 30 years with companies like Bass, Coke and Punch, and I don’t think I’ve learnt as much in a five-week period in all of that time.

“We are learning hour by hour. We are learning the art of the possible. There are definitely things we will carry on that we implemented such as home deliveries of beer and food into local communities, different things we can do in our packaging to make our beer more attractive to consumers that will want to stay at home.

“Also looking at ways in which we can, more innovatively, reach customers. The whole sector will look different when we reopen. If anyone thinks it will be as we were before but with a few tweaks here and there, they are deeply mistaken.

“We need to be ready to be ingenious and innovative and, in order to do that, we need a regime that allows the money for us to invest in doing that.

“But we must not lose sight of the biggest asks of the infrastructure to allow us to continue to survive and thrive.”

You can access the MA500 webcast by clicking https://onlinexperiences.com/Launch/Studio/ESH=43F25AC4-5CB0-4B04-A8CD-A898DCA7ADEA​​​

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