Hospitality supply chain businesses ‘on verge of collapse’ without immediate support

The UK’s hospitality sector supply chain is facing devastation with 324,000 jobs at risk unless businesses receive immediate financial support from the government, according to new research.

UKHospitality’s supplier alliance research highlighted the impact of the Covid crisis on the hospitality supply chain and the lack of financial support that has been received by businesses.

A survey found one in five jobs in the supplier workforce have already been lost, with the sector’s workforce at just 82% of its February 2020 level. One in three businesses have received no government grants or loans and, without support, two in five businesses will have to close, with one in five facing insolvency with a possible 324,000 redundancies.

Hospitality venues will need to return to 59% of normal trading levels to make supplier services viable.

UKHospitality has called on the government to use the forthcoming Budget to ensure that supplier businesses receive the necessary financial support. This includes a meaningful, national grant fund for the hospitality supply chain to allow viable businesses to invest in goods and services critical to a successful restart; and a government-backed invoice factoring scheme to free up funds for investment and mitigate some of the risk of trading through the restart.

UKHospitality chief executive Kate Nicholls said: “It cannot have escaped many people over the past year that hospitality businesses have been completely devastated by the Covid crisis. Much less visible, but by no means less terrible, has been the destruction heaped upon those businesses that supply restaurants, pubs, hotels and the entirety of hospitality…

“The totality of hospitality is dependent on its supply chain. If supplier businesses fail, then the entire sector grinds to a halt and we are at risk of the whole thing collapsing. We are hopeful that hospitality businesses can lead the recovery of the UK’s economy this year. That cannot happen if businesses are not supplied to do the job. The supply chain is everything and it must be supported.”