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Debt enforcement moratorium is the top demand for hospitality

01 May 2020 by
Debt enforcement moratorium is the top demand for hospitality

Confidence is at rock bottom among the bosses of Britain's pubs, bars and restaurants, with securing a moratorium on debt payments now their main business objective, the latest research has shown.

With cashflow concerns topping agendas, rent has become the number one issue, the latest CGA Business Confidence Survey confirms.

Although immediate survival is a top priority, many operators are tentatively developing recovery plans, but with predictions of a return to a vastly different and contracted market compared to before the coronavirus outbreak.

The poll of more than 120 senior executives and entrepreneurs from across the eating and drinking-out market was conducted by CGA in association with hospitality technology specialist Fourth during the week beginning 20 April.

It found that market optimism had plummeted from a four-year high in February, when 60% of bosses were positive about future prospects, to just 5% now, with 89% pessimistic. While confidence in their own business was slightly higher, with 15% being optimistic, that marked a fall from 83% in February and 31% in March. Now 69% are pessimistic about their own company's future.

Rent payments and landlord agreements were picked out by 40% of business leaders as the greatest challenge currently being faced, with a further 27% seeing them as a ‘major challenge'. Access to loans was the next big worry, with 17% seeing that as the biggest challenge and 37% a major issue. Banking relations, investor support and payments to furloughed staff were also on the list.

Overall, 89% of operators now support some form of debt enforcement moratorium, with an initial nine-month period the most popular option, backed by 39%, with another 23% preferring a year-long option.

However, there were differences in the rent outcomes bosses were preparing for. While 28% were looking for a rent-free period and extended lease, 26% were looking to a deferral, with another 20% expecting part payment in negotiation with landlords.

But when asked the question of what would be the best next measure the government could introduce to support their business, 70% went for a nine-month rent-free period to December, ahead of universal business interruption insurance (favoured by 17%) or removal of the £51,000 rateable value threshold for grants (13%).

Just 27% of businesses surveyed had any sites open, either for delivery (8%), grocery and food supply to the public (4%) or for NHS or community support (14%). Almost all businesses have furloughed nearly all staff; 83% of have furloughed over 90% and 96% over 70% of staff.

Of those with furloughed staff, 76% are not topping up wages, with 18% doing so excluding tronc. There was also wide support for extending the furlough, with a three-month extension after sectors reopen (backed by 36%) and a sector-by-sector extension dependent on opening (backed by 33%) the two most favoured options. The majority (81%) of operators have already started recovery planning.

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