Will the cost of reopening mean closure for some takeaways and restaurants?

Will the cost of reopening mean closure for some takeaways?

 

Social distancing rules will still apply and it will be limited to table service only but for businesses with no outdoor space or that have been relying on delivery orders alone, it’s set to be a red letter day for a lot of the hospitality industry.

 

Hotels, hostels and B&Bs are also able to open to the public rather than offering self-contained accommodation. 

 

The lifting of restrictions means that a maximum of six people from two households can meet in a group indoors with further restrictions set to be lifted in June. 

 

Kate Nicholls, chief executive of UKHospitality, said: “There is a huge sense of relief within the sector, in particular for the six in 10 venues that weren’t able to reopen due to a lack of outdoor space.

 

“However, with significant restrictions still in place, this is a psychological opening rather than an economic one, with the profitability of the sector still a huge issue.

 

“Hospitality, as it emerges from restrictions, is still in a fragile state and continued government support will be critical to ensuring the sector is rejuvenated and plays a full role in the wider economic recovery.”

 

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A Business Viability Review is a far better option than a guess

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While a number of takeaways, be they fish and chip shops, kebab and pizza makers or make the best jerk chicken outside of the USA and the caribbean, have been operating during lockdown, many haven’t been able to reopen. 

 

Some takeaways have been able to provide a click and collect, drive through or delivery services and won’t see a big change next week as they will be able to continue offering these. 

 

Food providers with an indoor dining facility will be able to reopen this for the first time in months but will have to follow some careful steps to make sure they remain safe and Covid-compliant when they do. 

 

Others might be reopening for the first time since the year of lockdowns began in March 2020, so will have a lot more to do and think about. 

 

Including whether it’s worth reopening at all. 

 

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Doing the reopening shuffle

 

A brief itinerary for reopening a takeaway or restaurant will look something like this:-

 

• Review staff numbers – how many staff do you need? Who is still furloughed? Who has got another job? How many do you need to recruit?
• Social distancing – is the premises set up to facilitate social distancing? Not just in front of the house but in food preparation and other departments too. 
• PPE – does the business have sufficient and appropriate PPE for staff? Can they source sufficient supplies to ensure the business doesn’t run out?
• Hygiene – has the business been deep cleaned since lockdown? Is there a cleaning routine established that can keep the preparation and dining areas consistently clean?
• Suppliers – if you haven’t been active for months then you need to reestablish regular supply arrangements. If your previous supplier is still operating then this might be easier but their prices might have risen significantly and payment schedules may also have changed.  If you need to find a new supplier then you may be competing with every other reopening takeaway which might lead to further delays. 
• Brexit – if you’re sourcing ingredients and supplies from the EU and other countries – will the new trade arrangements add expense and delays to your planning?  Do you need to look closer to home and change your menu accordingly?
• Existing supplies – Depending on your speciality you might be able to use pre existing stock but you have to make sure it has not passed use-by or best-before dates.  
• Adapting to new requirements – in the time between you were last open, what has changed in your customers tastes? Not just on your menu, but they might not use cash to pay for meals anymore or tip. Others might not like having a set time to arrive and leave if they are used to a more casual dining experience and this is assuming that they feel comfortable enough to physically visit an establishment to eat again. 
• What changes to diets and eating habits have come to the fore in the past year? Vegan, vegetarian and other alternative choices are now seen as a mandatory offering but what other parts of your menu needs to change to accommodate this?

 

None of this takes into the financial position of the business itself and how this has been impacted in the previous 12 months.

 

If the restaurant has been able to offer a take away or home delivery service then it will have been able to bring some money into the business as well as possibly taking advantage of government backed support measures such as the bounce back loan scheme or the coronavirus job retention scheme or furlough. 

 

For those that weren’t then things could be a lot more serious and bleaker. 

 

Debts will have continued to accrue, bills would have been paid all the while there’s no income arriving to offset it. Even if they accessed support measures, bounce back loan repayments are beginning to come due unless these have been deferred by six months.

 

The unfortunate but inevitable truth might be that some takeaways just can’t afford to reopen and instead should look at closing their business down properly so they can begin again.

 

This also applies to shawarmis, pizzerias and chippy’s that might still be trading but realistically have no way of clearing their debt and at best are just keeping their heads above water. 

 

Some might just need some breathing space to work out if the business could be viable again and produce a plan to achieve this. 

 

For others it would involve liquidation but depending on individual circumstances this could be easier, quicker and cheaper than they thought.

 

Before any decision is made the best thing to do is to get in touch with us. 

 

We offer a free, initial consultation where we can get the full breakdown of the circumstances surrounding the business.

 

Then we can tell you what you can do, right now, that will have an immediate impact and what choices can follow from that. 

 

Only then can you look forward to the future with some certainty and be able to plan far ahead of what’s for tea tonight.