One in five suppliers could close without Government support

The research shows the extent to which businesses in the supplier sector have been 'devastated' by the lockdown, with an average decline in trade of 78% and one in four not trading at all.

Looking to the 4 July hospitality restart, the survey shows that suppliers recognise their central role, with two thirds highlighting the importance of their services to an operator’s ability to reopen smoothly.

The survey reveals that the specialist nature of hospitality means suppliers tend to be dedicated to the sector, with 69% of respondents having 75% or more of their revenue purely within hospitality.

However, during the lockdown suppliers have had a patchy success rate in accessing support from the Government, and are concerned should that support be withdrawn while operators are either still closed or open but trading at historically low levels. 

In such circumstances, one in five suppliers surveyed say they expect to close; and three quarters of businesses would envisage having to make redundancies. 

With an average redundancy rate of 40%, that equates to 460,000 job losses across the hospitality supplier sector.

“The supplier network is integral to the hospitality ecosystem," says UKHospitality chief executive Kate Nicholls. 

"These businesses will provide critical support to operators and will be an essential part of a successful restart. Suppliers will also be the last to be paid.  It is vital therefore that Government provides immediate support through to the point where our world class hospitality venues are commercially viable. 

"Our ask is a simple one: parity with operators so that any ongoing measures in support of hospitality include the wider ecosystem.

“We have been encouraged to see a shift in guidance in some areas, for example on discretionary grants, to recognise suppliers are a significant part of the hospitality sector.  However, Government needs to adopt this position more widely to ensure suppliers benefit from measures targeted at hospitality businesses.

“After months of little to no revenue and with a requirement to invest in order to play their part in the restart, the supply chain is at a critical point.  Support now and they can play their part in ensuring he UK’s world class hospitality sector bounces back sharply. 

"Without support, many will go to the wall, operators will disappoint their customers and a potential 460,000 team members will find themselves unemployed”.