Will some companies be facing last orders?
Younger customers have been the first to return, while those aged 35-55 are coming back at a slower rate: “they want a bit more reassurance, they want to understand it’s safer out there.” All age groups, however, are staying more local and, as a result, community and suburban venues are faring better than average.
The specialist estimated that, with social distancing regulations in place, many pubs are able to operate at just 50-60% capacity – but, as a general rule, the break even point is at 80%.
In addition, with pubs closed for just over 14 weeks in England, there have been severe financial repercussions. The former managing director provided calculations for potential losses across pub companies and looked at the difference between groups.
The conversation moved to the government’s Eat Out to Help Out scheme, which provided 100 million subsidised meals. While many operators recorded substantial footfall Monday-Wednesday, it was questioned whether this shifted consumption across the week rather than creating new demand.
Numerous other government measures have supported the industry, including suspended business rates, which “helped many businesses out there, even arguably some that didn’t need help at the time really because their business was growing during lockdown”. The impacts of the VAT reduction, which operates until 12 January, and the furlough scheme, which finishes at end-October, were also considered.
The outlook for the rest of 2020 and into next year was also covered, as well as the potential for consolidation – and which players this could include.
To access all the human insights from Third Bridge Forum’s UK Pubs – H2 2020 Trading Update & Outlook Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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