Victor Lugger, whose restaurant business operates in the UK and also in France, where cafes and restaurants have been ordered to close, said that UK restaurateurs needed to face up to the fact that the UK was likely to follow other European countries in enforced restaurant closures, and that they had to start addressing this.
“I’ve been back and forth between the UK and France and here people are still acting as if everything is OK,” he told delegates at last week’s Restaurant magazine R200 event. “But it changes in 24 hours. Everything is normal and then the next day it is chaos.”
“People are thinking about how they can downgrade their workforce by 10% - that’s not the question you need to be asking yourself. It’s how I can be fully closed for six weeks and survive. That’s the question we are asking ourselves.”
Lugger said that Big Mamma Group, which employs 1,000 members of staff in France across eight restaurants, like many other hospitality operators faced a tough future. “How am I going to have 1,000 people on the payroll and close my restaurants for five or six weeks? When I do that, how many millions am I bleeding a month? I don’t have that any millions in my bank account and ongoing finance with the banks.
“How long can I keep my head above the water without firing everyone, and my staff are my number one asset.”
Lugger said that in France he had put 250 people into partial employment where they can stay at home and the government would pay 85% of their net salary for a month “to try and buy us another month and try and reach spring”.
In the UK, he said he was working with lawyers to discuss his options. “I have heard that I can reduce staff to working 16 hours a week but after that I have to close or let people go, which is extremely worrying for me.”
Since speaking, the Government has announced that people should avoid pubs and bars in an attempt to curb the spread of the virus. A number of restaurant groups have the decision to close their restaurants, including Woodhead Restaurant Group, which has closed its London-based Portland, Emilia and Clipstone restaurants 'until further notice'. Japanese restaurant Jidori will close until the end of the month.
“Most of the time for the last seven years I am always wondering why as founder of the company you make so much money eventually out of the business when people working hard are not earning that much," said Lugger.
“For the last five days I wake up in the morning and feel responsibility for the 1,250 people [in my company]. If I let them go now, they are not going to find another job - how the fuck are they going to pay their rent? That’s what we’re working on right now.”
Lugger said his primary aim was to survive the Coronavirus without having to lay any staff off. “I wish I can reach June, look back at the business and say ‘we went through that and didn’t let anybody go - that we left no man behind’.
“You can’t be saying you’re a family in the good times but then hit a bump in the road and suddenly let 300 people go and don’t give a shit about how they pay their rents.”