Widely-ridiculed for its arbitrary timing, the government‘s 10pm curfew comes into effect today, and will mean that all pubs, bars and restaurants will have to close their door to customers mid-way through a typical evening’s late seating. So, what will this new rule mean for food and drink outlets, and other hospitality businesses?
According to the Director of Conister Bank, Douglas Grant, the new 10pm curfew will force business owners to ask themselves a lot of difficult questions about the long-term viability of their businesses:
“For many businesses operating in the bar, restaurant and other hospitality sectors, the introduction of tonight’s curfew will represent a difficult choice over whether this is sustainable in the long run, especially considering that post 10pm takeaway is said to represent around half of all takings of many hospitality businesses, particularly those selling food and drink.”
To be clear, takeaway and delivery of food and drink will not be included in the 10pm cut-off, with government guidance stating that, “Businesses and venues selling food for consumption off the premises, can continue to do so as long as this is through delivery service or drive-thru.” Instead, it will only be the eat-in facilities of eateries that must close at 10pm.
Mr Grant adds that the new restrictions will force companies to rethink their business models: “In the brewing industry for example, Covid-19 has led to a rethink of their distribution models and we are seeing many brewing businesses now looking to transition from pubs to supermarkets for their distribution. Carbonated beer, for instance, has enjoyed improved sales driven by increased consumer demand at supermarkets. We believe that smaller sized breweries that have adapted to new consumer behaviours will likely weather the crisis and thrive, others should act fast to do the same.”
Indeed, as seen with the first company to raise over a billion dollars on Crowdcube, Brewdog, breweries are doing their best to expand their offerings outside of pureplay drinking establishments. For instance, in Brewdog’s case, the company has been rolling it a growing range of its products in supermarkets over the last few years. And during lockdown, the company had to compensate for reduced footfall in its pubs, by offering burger and beer deliveries, and launching loyalty schemes. At present, the company is still finding new ways to adapt, and is currently hosting an equity crowdfund to plant a sustainable forest in Scotland – though many are wary of the business’s limited income potential.
Mr Grant finished by saying that renewed government support is vital, especially in the process of hospitality sector companies adapting to the ‘new normal’:
“We are now at a critical point where more resilient sectors, like the brewery industry, are protected by a tripartite level of sustainable support from Government, alternative and traditional lenders working together to ensure their existence is guaranteed. Specialist leasors have been stepping in to help the UK’s brewing industry to resolve some of these issues, enabling brewers to outsource some of their equipment so they can focus on making their products commercially available as soon as possible to capitalise on supermarket distribution and demand.”
Today, the UK Chancellor launched the Job Support Scheme, which aims to supplement the wages of ‘viable jobs’ (where people are still working at least one third of their usual hours). He also announced ‘pay-as-you-grow’ measures which defer payments for the business interruption loans and bounce-back loans, as well as delaying the date of previously deferred VAT to be paid, and extending the VAT cut on the hospitality sector, with the 5% rate remaining in place until March 31.