Restaurants and hospitality organizations in the United Kingdom are seeking government support to help them weather the COVID-19 pandemic, as two major restaurant companies announced closures.
London-based Casual Dining Group is entering administration and will close 91 of its 250 restaurants, The Independent reported. The closures affect Bella Italia, Cafe Rouge, and Las Iguanas, which will result in around job losses for 1,900 employees.
London-based Pret A Manger also said it will close 30 locations across the country, impacting around 1,000 jobs, BBC reported.
"It's a sad day for the whole Pret family, and I'm devastated that we will be losing so many employees. But we must make these changes to adapt to the new retail environment,” Chief Executive Pano Christou told the BBC.
In light of continued restaurant and hospitality losses, 120 industry leaders signed a proposal urging the country's government to provide funding and incentives to the sector.
Sales in the hospitality sector will drop by around 56 percent this year – a revenue loss of around GBP 73.4 billion (USD 92 billion, EUR 81 billion), according to UKHospitality. And 50 percent of the U.K.’s hospitality businesses do not expect to reach break-even earlier than the end of 2021, Imbibe reported.
“Our sector has been a high-profile casualty of this crisis and businesses are only now just beginning to reopen,” UKHospitality Chief Executive Kate Nicholls said in a press release. “For those businesses that have survived, the hard work begins now. We cannot assume that we are now in the clear just because our doors are open again. Many businesses have taken huge hits and hundreds of thousands of jobs are still in the balance.”
Nicholls added that government aid so far has been helpful, but that the support must not stop if the restaurant sector in the U.K. is to make it through the COVID-19 crisis with minimal losses.
“If we want to make a real success of this reopening, keep businesses alive and jobs secure, then the government needs to provide support,” Nicholls said. “Support from the government has been extremely helpful in keeping venues afloat and it has saved jobs. There is no possibility of stopping now, though. Anything less than a full show of support from the government risks undoing much of the good work that has already been done and will cause lasting damage to employment and the U.K. economy.”
The proposal advises the government to offer support according to these criteria:
- Restart by “extending the deferral of all tax liabilities currently falling due in July to cover the closure and reopening period in full, removing the obligation to pay interest on late payment,” and by establishing a grant to help businesses cover rent debt.
- Recover, by incentivizing spending through a VAT reduction to 5 percent for hospitality services, and by extending the furlough scheme for hospitality employers until the end of October.
- Revive, by “extending the hospitality business rates holiday to March 2022 ahead of fundamental reform of the business tax system.”
Photo courtesy of Alena Veasey/Shutterstock
