Concerns abound in restaurant industry as COVID-19 outbreak continues disruption
A majority are expecting their businesses to take a hit.
Temporarily closing stores and experiencing less footfall is slowly becoming the norm in markets around the world, especially those greatly affected by the novel coronavirus disease now known as COVID-19.
The restaurant industry is one of many areas greatly affected by the outbreak, already affecting over 100,000 persons according to the World Health Organisation.
Like its counterparts around the world, food & beverage operators echo one definite sentiment: the potential impact of COVID-19 in the UK and Europe is difficult to determine at this stage.
“As the COVID-19 situation continues to evolve globally, Starbucks business operations in Japan, South Korea and Italy have also been impacted by store closures and/or reduced customer traffic. Given the early stage of these developments, we are currently unable to forecast business impacts in markets outside of China with reasonable accuracy,” the coffee giant said in its letter to stakeholders.
“We are monitoring this closely, and have established contingency plans,” Domino’s Pizza Group said in its latest trading update.
A McDonald’s spokesperson detailed some of the measures they are taking, such as sanitising surfaces such as door handles, self-order screens and tablets frequently throughout the day and frequent communication with their staff.
“We are closely monitoring any potential impact of coronavirus on our people, customers and in the communities we operate in. We are committed to the highest standards of hygiene and cleanliness, with a number of detailed procedures in place in our restaurants to prevent germs from spreading,” the spokesperson told QSR Media.
Pret A Manger, meanwhile, stressed that they too are monitoring the situation “closely and listening to the government’s advice.”
“We’ll keep looking at all aspects of our operations to make sure that we’re applying the latest official guidance from the relevant authorities,” a spokesperson for the sandwich chain said.
Deliveroo, meanwhile, says it has sent official guidelines to riders and restaurant partners on how to keep safe, based on PHE and NHS advice. This includes what to do if they think they may have symptoms, and how to stay safe when they are on an order. QSR Media understands that the delivery platform is in touch with PHE on a daily basis to take advice on their operations.
‘Negative’ impact expected
A new poll recently revealed that 85% of senior executives across the out-of-home food and drink market said they were now “concerned” about the threat of coronavirus to their business, with 58% of leaders “very concerned”.
CGA’s snap survey of close to 100 bosses also revealed that the majority are expecting a hit on sales, with 42% suggesting it will have an “extremely negative” impact and 51% saying it will be “quite negative”. In addition, over half (51%) predict it will have an “extremely negative” impact on their profitability, with a further 44% suggesting it will be relatively negative.
In terms of what businesses are doing to minimise the coronavirus risk, 83% said they are producing staff guidelines to encourage hygienic practices, 65% increase availability of hand sanitisers on-site and 61% minimised cash flow risks.
Other actions include producing staff guidelines on how to self-isolate (60%), producing staff guidelines for travel and health (56%) and developing a plan to minimise impact of potential site closures (48%).
In terms of paying staff who self-isolate, just 47% definitively said that they will do this, whilst 45% have not made a decision as yet, with just 8% suggesting that they will not pay staff who self-isolate due to the virus.
Moratorium on business rates urged
Trade body UKHospitality had written to the Prime Minister highlighting the impact of COVID-19 already being felt in businesses around the country, urging government to implement a moratorium on business rates for a minimum of 3 months, business payment delay to ease cashflow and a VAT cut for hospitality and tourism to incentivise bookings.
“Hospitality businesses are on the front line, so to speak. There has been a significant impact on the sector. Bookings are down, footfall is down, and all signs point to it getting worse before it gets better,” UKHospitality Chief Executive Kate Nicholls said.
“This is now an emergency for our sector. If Government doesn’t act to mitigate the impact and give us support, businesses are in danger. This means cash flow becomes a problem, venues are under threat and jobs at risk.”
