Industry hit by 'double whammy' of Coronavirus and immigration policy

The poll, from CGA, found that 85% of senior executives across the out-of-home food and drink market said they were now “concerned” about the threat of Coronavirus to their business, with 58% of leaders “very concerned” about what the potential spread of the virus could mean for business.

The survey of almost 100 leaders from small entrepreneurial operations up to the big corporates also revealed that the majority are expecting a hit on sales, with 42% suggesting it would have an “extremely negative” impact and 51% saying it would be “quite negative”. In addition, over half (51%) predicted it would have an “extremely negative” impact on their profitability, with a further 44% suggesting it will be relatively negative.

A separate poll conducted by CGA of consumers this week found that so far the public is not quite as concerned, with 57% of consumers predicting that they will eat and drink out as much over the next three months as they currently do.

There is also likely to be a rise in consumers using food delivery, especially if told they need to self isolate. An online survey of 1,000 consumers conducted by UK food and drink insight experts HIM & MCA Insight found that 19% of people would use delivery companies either slightly more or much more if there were a major Coronavirus outbreak, although 39% said they would use them about the same as they were at present.

Issues surrounding the outbreak of Coronavirus have been impacted by the government’s announcement of tougher immigration rules, according to CGA, which reports that only one in five business leaders were confident in their capabilities to recruit, train and retrain a workforce, has seen overall business confidence take a tumble.

Earlier this week, trade body UKHospitality warned that more than 200,000 hospitality job vacancies would be left unfilled ​​if the Government’s new immigration bill is enforced in its current form, with chief executive Kate Nicholls saying​ that “vital segments of the economy would grind to a halt” if the proposed points-based system and salary threshold were introduced.

At the start of the month, CGA’s annual Business Leaders’ Survey, conducted in partnership with hospitality technology specialist Fourth, showed sector optimism at a four year high. This latest poll showed that in just a matter of weeks it has fallen to the lowest point since immediately after the EU referendum, with just 16% of bosses now optimistic about the market over the next 12 months, down from 60%. Optimism around their own businesses’ prospects has also plummeted, with just 29% optimistic, a fall from 83% in early February.

In terms of what eating and drinking out businesses are doing to minimise the Coronavirus risk, the main actions are producing staff guidelines to encourage hygienic practices (83%); increasing availability of hand sanitisers on-site (65%); producing staff guidelines in case of isolation cases (64%), minimising cashflow risks (61%), producing staff guidelines on how to self-isolate (60%); producing staff guidelines for travel and health (56%); developing a plan to minimise impact of potential site closures (48%).