Coronavirus: Impact on pubs and restaurants

Categories: Salford Business School

Dr Gordon Fletcher, retail expert from the University of Salford Business School, comments as Boris Johnson advises people to avoid pubs, clubs and restaurants.

Dr Fletcher said: “A week after the budget gave small businesses on the High Street hope, the government's scaling-up of public health advice last night has left the hospitality industry reeling.

“A cursory walk around local establishments last night revealed even the traditionally quiet Monday evening was unusually barren and this abandoning of pubs and restaurants will only become more obvious as the current week progresses. This is a sector that generally does not generally have large reserves and even a couple of weeks trading under the current government guidance of avoiding non-essential contact will cause significant problems.

“Pubs and restaurants have been left to battle it alone as they cannot apply force majeure clauses on leases that require the business to remain open or the opportunity to access to the financial support offered in the Government's budget to tackle COVID-19. This situation threatens small businesses by directly cutting off their cash flow. Large chains will also feel the impact very quickly.

“Carluccio’s has asked for a three-month rent 'holiday' as the impact of the pandemic becomes more acute. The chain had already publicly stated that they were two weeks from going under before a reprieve in the last few months but without a chance to trade themselves out of difficulty this familiar high street tenant is once again under threat. The impact of the ongoing debt burden being expereinced by the Intu group - who own key shopping malls such as the Trafford Centre - will now become acute as shoppers avoid their tenants which, in turn, will make it difficult for them to meet their lease payments to the property group.

“The Laura Ashley group has filed for administration today and cited the coronavirus as the cause for the breakdown in negotiations to save the chain. It is clear that the first businesses to fail as a result of the pandemic will be those that were already struggling on the high street. Unexpected or accelerated permanent closures during this time presents a double danger for employees who will then be seeking new opportunities at a time when all businesses will be carefully considering their own financial situation and operating in locked down conditions that are closed to outsiders.”

For all press office enquiries please email communications@salford.ac.uk or phone 0161 295 2238.