Restaurants 'should plan for the worst-case scenario' with coronavirus

By BigHospitality

- Last updated on GMT

Restaurants 'should plan for the worst-case scenario' with coronavirus

Related tags: Coronavirus, Restaurant, Casual dining

Restaurant operators should plan for the worst-case scenario with the coronavirus outbreak, according to people close to the sector.

Speaking at yesterday’s Restaurant magazine​ R200 conference, Brandon Stephens, advisory partner at TriSpan and founder of Tortilla, said quite a few businesses were “on the precipice”, with just “a little push and they are going to go over”. “This isn’t a push this is a full blown shove”, he said.

He said operators were currently focused on cash hoarding over fears that the UK could go into lock down, which would have a big impact on sales. “The possibility of the UK Government following what has happened in Italy is scary. We’ve run a number of scenarios, 20% down, 40% down. But what if we were 100% down? What would we do? “It’s very surreal. For those looking at planning its worth looking at the worst case scenario.”

Harry Heartfield, partner at Edition Capital, said he was looking at which businesses in his portfolio require additional support. “It really is just about that worst case scenario, making sure they’ve got good capitalization at this point in time,” he said at the event.

“I think anyone who’s trying to open sites and is treating it as though nothing has changed is likely to be in for a fairly unpleasant shock in the next couple of weeks. There will be increasing pressures on staffing, with people who’ve got no childcare options and all of a sudden have to stay home with the kids instead.

“There will be all sorts of different competing pressures, and it is about keeping cash or putting cash into these businesses to make sure they can survive the next six months because it’s not going to be an immediate fix.”

Street Feast co-founder Jonathan Downey has warned that a complete lock down would be ‘disastrous’ for the restaurant sector. “It’s hard to see how anyone can survive such a prolonged period of sales collapse.”

Downey is calling for the private sector to help out the industry. “Banks need to provide debt repayment breaks and hold off on enforcing security and landlords must allow rent to be postponed. All of these things need to happen otherwise businesses will fail and tens of thousands of jobs will be lost.”

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