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Forbidden cities: how businesses are dealing with local lockdowns

27 August 2020 by

While restrictions are being relaxed for most of the UK, localised closures for areas with rising cases seem to be a growing part of the government's strategy. With financial support for the pandemic winding down, Emma Lake takes a look at the effect on hospitality businesses.

"Targeted local action… where speed is paramount", was introduced by the prime minister as government policy for tackling spikes in cases of Covid-19 in July.

Leicester had already become the first city to see the lifting of restrictions halted at the start of that month, eventually beginning to emerge from lockdown four weeks later than the rest of the country on 3 August. Areas of Greater Manchester, Lancashire, West Yorkshire and Aberdeen have since followed, with new rules introduced with just a few hours' notice.

While in the north of England the measures so far announced have not seen hospitality businesses ordered to close once again, in Aberdeen, pubs and restaurants had just a few hours' notice to shut the doors and place their teams back on the furlough scheme.

Reports of rising cases are being closely monitored as the government highlights ‘areas of concern', which, at the time of writing, included Peterborough, Swindon, Northampton, Wakefield and Birmingham among other regions. With officials having shown they will not hesitate to act at short notice, the potential impact could be devastating to businesses that have already endured four months of no trade.

Greater Manchester

In Manchester a ban on the meeting of people from different households in indoor settings, including pubs, bars and restaurants, was announced on the evening of Thursday 30 July, coming into force at midnight the same day. The result among consumers was confusion around what was allowed, as well as a knock to confidence.

For operators, those initial days saw reports of mixed fortunes, Will Beckett, co-founder of Hawksmoor, said 75% of that weekend's reservations at its Deansgate restaurant had been for tables of two, with just 10% lost overall. However, Simon Wood, chef-founder of Wood restaurant in city centre, saw more than a third of bookings cancelled on the Saturday, two days after health secretary Matt Hancock announced the measures. As the weeks have progressed, however, Wood said that Manchester's residents have adapted and continued to dine out, even if it is only with their own households. He explains: "Last week was our busiest week since we opened, and this week is even busier. Everything is at the right distance and people are wanting to come out and spend money.

"We've had a really good positive vibe around the restaurant. People haven't been out for so long that they go a bit nuts when they're here, going for the 10-course tasting menu, premium wine flight, cheese afterwards. It's great – I've never sold so much cheese."

In response to the restrictions, Wood has seen more tables of four becoming tables of two, but also an increase in the lunchtime trade.

He adds: "Saturday lunch has always been OK, but really we're a Saturday night restaurant. But I had around 44 booked in on Saturday lunchtime – I cap Saturday night at 70, so 44 at lunchtime is big, I think it might be that people are looking to avoid the late night bar, transport home scene."

"Businesses cannot be expected to shut down and survive for any substantial period of time if they have no revenue"

Leicester

In Leicester it was the lasting impact on consumer confidence that concerned operators as they waited for permission to reopen the doors.

Sally Davis, co-owner of North Bar and Kitchen and North 42 gin, worries that the view of the city has been "tarnished". She explains: "People were ringing to book a table and I had to say, ‘I can't take your booking because we're in the lockdown and unaware of when we can reopen.' That puts us on a back foot.

"We need to make sure people are coming back into the city, that they're safe, that they want to [be here]. We need to ensure the publicity around the city is right and that we're portrayed in the right light.

"There needs to be a marketing campaign and we'll have to put more measures in place to make people feel safer. For example, we might have to pay to have fogging, just so that people will think it's safe. "There will be cost implications to get that going, but you look on the news and Leicester has been put on the map for the wrong reasons. You can even look at the Netherlands – they are saying you can come to the Netherlands, except if you're from Leicester."

Francesco Topan, owner of Casa Romana restaurant in the city centre, said that once he was able to open his doors to guests, albeit only to tables from single households, demand was reassuring, aided by chancellor Rishi Sunak's Eat Out to Help Out scheme. But he too has concerns about what will happen in the long term. He explained: "Eat Out to Help Out has helped a lot. We're having a fantastic beginning to the week – it looks like Saturday night on a Tuesday. What concerns me is what will happen when the scheme finishes. It's all a bubble at the minute."

The restaurateur is keen to move on the conversation. He says customers emerging from the extended lockdown "want to have a fun time. They don't want to talk about what they've been hearing on the television for months."

Marketing and support

While some diners might feel confident returning immediately after local lockdowns are lifted, others may be more hesitant, with many operators suggesting that specific support will be needed to help these areas reopen. Mark McCulloch, founder of digital brand consultancy Supersonic Inc, said: "I would call on the government to have a reboot and restart package. It seems unfair that Aberdeen and other areas have missed out on some or all of Eat Out to Help Out – I think the government needs to be flexible.

"They should be able to do maybe a two- week blast alongside a recognised government message saying, for example, ‘Leicester is Covid safe'. It's only natural that people in Brighton, Glasgow or wherever might have a dim view of, for example, Leicester – how do they know that it's OK to go back?

"They need some press to say the R rate is under one and it's back to business as usual. That needs to be going out from the government, local council and insiders, otherwise it will take six to eight weeks, or more, for people to brave enough to go out again.

"But, it needs those three tiers – the government, the local council and the operators themselves – to go out and show how safe they are and how seriously they're taking it.

"What concerns me is what will happen when the scheme finishes. It's all a bubble at the minute"

It seems that message is working countrywide, so there's no reason why with a bit of focus and concerted effort that it wouldn't replicate in these areas."

In Manchester, Adrian Ellis, general manager of Manchester's luxury Lowry hotel, is working with Marketing Manchester to stimulate demand for the autumn, by which time he hopes all restrictions on the area will have been lifted.

The team hope to sell the city as a safe place, and the city's hotels will be taking part in the Night On Us campaign, offering three nights for the price of two to encourage people to visit and serve a boost to hospitality businesses.

When it comes to support, both Topan and Davis feel more could have been done to communicate with businesses in Leicester.

Davis says many operators in the city felt the blanket lockdown may not have been necessary and are calling for data to be released and analysed to determine if the impact on the city's economy could have been reduced if a more targeted strategy had been employed.

Looking forward, Topan says the city's position should single it out for further support. He adds: "They should look after Leicester – 31 October is not very far away and from 1 November we must take all the bills ourselves, with furlough finishing, then rates and VAT will come back. It's all ticking away. We're going to need more help, otherwise 40%-50% of businesses in Leicester will suffer a lot and many will close the doors."

It would be naïve to think we've seen the last of local lockdowns, which in July the prime minister said would remain a "feature of our lives for some time to come".

But with support schemes coming to an end, such a sharp, sudden shock could spell disaster for operators whose reserves have already been depleted. The potential impacts of lost stock, a second freezing of revenue, wage bills and the need to return to the negotiating table with landlords and suppliers will be daunting to say the least.

The Treasury has confirmed that there are no plans to change the furlough scheme, which is now restricted to those who have previously been enrolled and will conclude at the end of October.

A spokesperson for the government department explains: "Closing the scheme to new entrants is necessary for a gradual closure of the scheme. The focus is now on bringing those currently furloughed back into productive employment."

However, there are suggestions that some financial aid may be given, with Leicester City Council receiving a £2.6m injection from the government to supply discretionary grants to small and micro-businesses affected by the local lockdown. Similarly, the Scottish government has provided a £1m support fund, which will provide grants of £1,000 and £1,500 to businesses affected by the closure.

Kate Nicholls, chief executive of UKHospitality, stresses the importance of resuming support if businesses are to survive further blows: "Businesses cannot be expected to shut down and survive for any substantial period of time if they have no revenue. Full furlough has already ended and support will wind down in October, even for those parts of the sector that are still unable to open, either by law or commercial viability.

"Meanwhile, staff still need to be paid and other bills, notably rent, continue to pile up. If venues are locked down again for any substantial period, they will need government support to survive.

"Consumer confidence is going to be key to the reopening and it is going to impact on business all year. If customers do not feel safe, they won't go out. We need not only local authorities to be supportive but the devolved governments and Westminster, too."

Further restrictions ahead

Scotland's first minister Nicola Sturgeon announced a cluster of Covid-19 cases that would see Aberdeen locked down again, and directly linked the surge to people meeting in hospitality venues.

There followed an increase in restrictions on hospitality venues across the country, from a ban on the playing of music to a legal requirement for track and trace to be completed effectively.

Sturgeon says: "To say that the incident in Aberdeen is deeply regrettable is an understatement.

"But it underlines an extremely important point: any time one of us fails to abide by the rules, we put others at risk and give this virus the chance to come roaring back."

In England, scrutiny of what businesses are doing to collect customer details has led to headlines pointing a finger at pubs and bars ignoring Covid-19 guidance in area where cases are rising.

UKHospitality chief executive Kate Nicholls has repeatedly stressed the need for hospitality businesses to abide by regulations and demonstrate that the industry can keep customers safe.

She explains: "We need all businesses to be doing this [track and trace]. It helps absolutely nobody if we get another spike and further local lockdowns.

"We heard from members in Aberdeen who had not even been contacted about their test and trace processes before being publicly cited in lockdown communications. It seems unfair, to say the least, that those businesses doing the most to keep tabs on customers are the very ones in the firing line."

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