Casual dining industry ‘will be changed forever’ without government intervention

Top casual dining bosses have called on the UK government to make meaningful intervention to support the industry, which is seeing footfall “worsening by the day” due to coronavirus, a situation set to worsen following the Prime Minister’s advice today to avoid pubs, bars and restaurants.

Carluccio’s chief executive Mark Jones went public yesterday with the news that the restaurant chain was attempting to negotiate three-month ‘rent holidays’ with its landlords and called on the sector to work together to prevent closures by talking to landlords, local MPs, UKHospitality and government.

Jones urged the government to scrap business rates altogether for businesses as the recent threshold of £51,000 or under for a year's rate relief was too low for most hospitality businesses and gave the example of Denmark, which has told companies that it would cover 75% of employees’ salaries if they promised not to cut staff.

Steve Holmes, chief executive of the Azzurri Group, which operates brands including Zizzi, Ask Italian and Coco di Mama, said the government needs to be supporting banks to thereby help landlords to be able to defer restaurants’ rental payments.

Sunday 15 March showed a 44% fall in footfall compared with the same day last year, according to data captured by Wireless Social, with a 28% fall over the last week year on year.

“It’s a fairly good proxy for what we’re seeing across the industry right now,” said Holmes.

When it came to the possibility of the government forcing restaurants to close, Holmes said without intervention, some restaurant businesses could fail in a matter of “days”.

“If we’re in a situation where our restaurants are closed, and you’ve got no revenue, then I don’t think many restaurants will be able to survive for very long at all,” he said.

“It might be a number of days – 20, 30, 40 days – but we’re counting days, not weeks.”

Jones added: “Restaurants will have no income but they’ll have rates to pay, rents to pay and staff to pay. That’s going to be very difficult for any business to do.”

Both said the situation had been too fast-moving for any level of contingency planning.

“We plan everything but every time we come up with a worst case scenario, it gets worse,” said Jones. “We don’t want to get through all this to find out that one of the victims was the high street… and that could well happen if there isn’t that very dramatic intervention by the government.”

Holmes added: “The government need to intervene. Five percent of GDP comes from the hospitality industry and if government doesn't intervene, ie, support the banks to support the landlords to help us, then I think we’ll see lots of job losses and the shape of the casual dining industry will be changed forever.”