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Hospitality is 'bearing the brunt' of tier pain

·3 min read
Restaurant signs in Shoreditch, London
Restaurant signs in Shoreditch, London

The hospitality sector is "bearing the brunt of the pain of closure" under new Covid rules, the industry has warned.

The government set out on Thursday what level of restrictions England's regions will face when lockdown ends with cities such as Manchester and Birmingham put in the highest tiers.

UK Hospitality boss Kate Nicholls warned tens of thousands of businesses will close without additional support.

It comes as more pub groups were forced to make additional job cuts.

Mitchells & Butlers, owner of the All Bar One and Harvester chains, revealed it had cut 1,300 jobs while Fuller Smith & Turner made 350 redundancies.

Ms Nicholls said that 98% of its members were in areas with Tier 2 or Tier 3 coronavirus restrictions, and nearly nine in 10 "say that they are not viable to operate at those level of restriction".

Under the new restrictions, which come into force when lockdown ends at midnight on 2 December, pubs in Tier 2 regions can only open if they serve substantial meals and households are not allowed to mix indoors.

Under Tier 3, pubs and restaurants must close their door but can offer takeaways.

Ms Nicholls said: "Without additional support to sustain these businesses through this crisis, we are going to see tens of thousands of businesses closing and over a million job losses."

'Devastating news'

Birmingham City Council leader Ian Ward said hospitality and other businesses needed a "meaningful package" of support from the government so the economy can "continue to function in an effective way".

"The crisis faced by hospitality businesses across Birmingham is of particular concern from an economic perspective - a crisis that would have been exacerbated whether our city was placed in Tier 2 or 3," said Mr Ward.

"Many businesses in this previously thriving sector are warning they may not survive the coming months if they are dealt the double blow of more restrictions and inadequate financial support."

Bar staff member pours pint
Bar staff member pours pint

The Night Time Industries Association (NTIA) described the imposition of the tier three level as "devastating news" for those areas.

"The government must compensate these businesses for the period of time they have been closed, and the loss of business suffered due to restrictions through the festive period," said NTIA chief executive Michael Kill.

Job losses

On Thursday, Mitchells & Butlers revealed it had been forced to make job cuts, beginning in October, "despite our best efforts to protect as many jobs as we can".

The company reported a loss of £123m in the year to 26 September, compared with a profit of £177m the year before.

It said it had "gratefully received" government support including furloughing staff, a rates holiday, and a VAT reduction on certain supplies.

However, in spite of that support, M&B said it had "not been immune to the impacts of the pandemic".

As well as shedding jobs, rival pub group Fuller's reported a loss of £23m during the six months to 26 September, compared with a £14m profit last year.

Pubs, bars and restaurants have been among the hardest-hit businesses due to national and regional lockdowns and coronavirus restrictions, and reduced footfall.

The British pub industry sent a letter on Wednesday pleading with Prime Minister Boris Johnson to save the industry, which it said was facing "the darkest of moments".

Fuller's, Carlsberg UK, Greene King, and Heineken UK were among the firms warning of huge job losses due to coronavirus restrictions.

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