Posted: 15.04.20 at 10:45 by Nick Hudson
PUBLICANS in Atherstone face a long “struggle” back from the brink as alarming research reveals one in 10 small firms have already begun plans to close, sell or hand on their business in response to the coronavirus lockdown.
Covid-19 has drunk the hospitality industry dry as IPub manager Paul Casey admitted it was hard to be upbeat about those in the group's charge – the Market Tavern, Black Horse and New Swan – as they had never faced being closed before “not even in World War Two”.
But at least one Atherstone landlady said she could not understand why businesses in receipt of £10,000 Government grants “should not be coping”.
Mr Casey, who looks after the Red Lion in Barwell, said hopes of restrictions being relaxed in early May are probably premature with everything pointing to lifting lockdown in mid-June.
He told Nub News: “There is no way that this will be sorted inside the 12 weeks that the loans and grants are geared up for.
“Lockdown started in mid-March, and will not end until mid-June.
“Even if it did end on May 3, we would still have been closed for six weeks.”
Industry insiders are estimating up to 15 per cent of UK pubs will not reopen after lockdown is lifted.
And Mr Casey added: “Landlords will struggle when we do reopen. Some tenants will not renew their leases.”
Breweries are looking at reimbursing pubs for their unused full barrels but not their already opened ones.
Mr Casey sees this as “small beer” as he says it’s easy to lose around £1,500 in barrels partly used across the pub’s range of brews.
Some breweries are offering rent-free holidays, others not, and “there’s still the VAT to pay”, he added.
There has also been talk of breweries stopping staff furloughing when full rents are re-imposed on pub landlords.
His comments come as a survey from the Federation of Small Businesses reported one in 10 small firms are beginning the process of closing, selling or handing on their business – with Covid-19 lockdown cited as the main reason.
An additional one in five are planning to downsize their operations, according to poll of 1,500 businesses. One in seven small firms have already laid off workers and a third said they plan to do so at some point during lockdown.
Around one in three businesses across the UK has furloughed between three quarters and all of their workforces due to the coronavirus crisis, a British Chambers of Commerce survey reveals while just two per cent of firms have successfully accessed the Government's Coronavirus Business Interruption Loan Scheme so far.
And independent tax and spending watchdog Office for Budget Responsibility has warned the pandemic could trigger a record 35 per cent drop in UK growth if the current lockdown lasts until June. Unemployment would soar from 3.9 per cent to around 10 per cent – that's 1.3 million to 3.4 million – it says.
But Nub News found some positive pointers amid the obvious gloom.
Over the last few days Atherstone firms have seen around £4.5 million distributed across North Warwickshire by the borough council under the Government’s Small Business Grant Scheme – which provides a one-off payment of £10,000 for companies who currently don’t pay any business rates. Around £10 million is thought to be available in total.
Angel landlady Carol Evans said at this stage in the Covid-19 cycle she saw no reason why businesses “should not be coping”.
In receipt of the £10,000 business grant and staff furloughed with the Government paying 80 per cent of the salaries, she said: “This will certainly tide us over.
“We did see it coming as other countries had locked down before us.
“So instead of taking deliveries in the week prior to restrictions being imposed, we cancelled them.
“We deliberately ran our stocks down. It was the sensible thing to do.”
The industry is also trying to look to the future.
To help face whatever lies ahead, a £1 million ‘Save Pub Life’ campaign has been launched by the Budweiser Brewing Group to allow customers to support their local through the bad times – and get their drinks lined up for the grand reopening.
Regulars can buy an online gift card – from £10 to £100 – to use when it reopens.
Budweiser – part of the AB InBev brewing group – will match that spend straight away so the pub gets double the amount, even though it’s closed.
As well as buying vouchers, punters can nominate their local pub to be included to try and help them through this Covid-19 virus crisis. This can include social and sports clubs and associations as well as pubs throughout the area.
The hope is this financial support will go straight into pubs, providing them with vital funds when they need it most. For more details click here.
Meanwhile, All Bar One giant Mitchells & Butlers is the latest firm in the sector to secure vital breathing space from their lenders to weather the coronavirus crisis.
M&B, which also owns the Toby Carvery and Harvester chains, said it had agreed a waiver with lenders until May 15 to avoid a debt default after being forced to close all of its 1,700 sites amid the lockdown.
It has furloughed 99 per cent of its employees, with basic pay for all its employees – including board members – reduced to between 60 per cent and 80 per cent, depending on how senior they are.
The group also said its costs have been slashed to the minimum necessary to keep the estate of pubs and restaurants secure and safe.
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