Support now incoming for the Hospitality Sector

Posted by starstock | November 20, 2020 | Categories: Industry News

Super Saturday has been and gone – there have been the expected scenes of mass gatherings, forgotten social distancing and some very questionable choices.

A few pubs have had to close due to Covid19 outbreaks whilst others have taken a view that they could not support safe drinking and so have taken additional steps such as early closure, “outside only” or “book a table”. Whatever has happened over the last weekend we are now entering a revised version of ‘normal’ whilst the nation finds her feet again.

In a lot of cases pubs have been forced to decide to open in order to get cash back in the till to pay the rent. I was amused by a local landlord who started last Saturday with a social post of ‘I owe, I owe – it’s off to work I go!’ As funny as it was – the message is so true – they need to earn to survive and in order to do that they must get the till ringing again (even if it is with a reduced capacity and therefore reduced takings.)

Sam Ulph – CEO of StarStock, states:

At this moment in time with volumes expected to be down at least until Christmas. Any savings which can be provided to the Hospitality & Leisure Industry to help them survive is a good thing.

Today’s announced measures of a reduction in VAT to 5% for six months on food and accommodation is a welcome relief to this sector which has been hit hard by closure and fear.

And this flows through to consumers too – the number of possible job losses and reduced salaries means that there is less cash to spend on leisure and therefore less opportunity in a sector which is trying to recover. This is further bolstered by the revolutionary “Eat out to Help out” initiative which is a first for this country – this scheme will allow people to claim up to 50% of qualifying spend against meals and soft drinks throughout the month of August from Mondays to Wednesdays.

Phil Newton – MD at StarStock says:

I am delighted to see the cut in the rate of VAT for the hospitality sector, this is one vital step needed if we are to help pump up the revenues and secure jobs for the future, but let’s be clear, we will need other financial support mechanisms as the sector will be one of the slowest to recover with the continued social distancing measures restricting customer numbers.

Clearly the overarching sentiment is one of support – we must not forget the leisure and hospitality sector nor should we think that now that they are permitted to open ‘everything is ok’ because the reality is that our fragile sector needs continued support.

In short, through VAT reductions a pub, bar or restaurant can either make a saving on the selling price (promoting more sales) OR a little extra profit on each sale which in turn helps to feed a family, puts fuel into a car or allows another member of staff to be paid – thus protecting jobs, helping more people survive.

The additional 50% discount scheme will need to be funded by the outlet and claimed back retrospectively but, as with the furlough scheme, if this is accessible and as quick as promised then we do not see an issue with it.

Whilst the tone of my post seems a little gloomy I want to reiterate that we are welcoming the changes and support – I strive to highlight the fragility of the sector and champion it’s resilience. Through our (StarStock) work on mypubshop we have seen businesses pivot and become a vital lifeline for their communities with an incredible (and very British) spirit. It is this very spirit that we need to foster and encourage in order to keep the industry afloat over the coming months.

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