Scottish hospitality businesses face '£3.5m shortfall' during circuit breaker

By BigHospitality

- Last updated on GMT

Scottish hospitality businesses face '£3.5m shortfall' during circuit breaker

Related tags: Scotland, Curfew, Alcoholic beverage, Restaurant, Public house

Scotland’s restaurants and pubs will receive only £415,000 of Government support over the country’s three-week ‘circuit-breaker’ despite it costing business over £3.5m to close, the Scottish Hospitality Group (SHG) has claimed.

A survey across the SHG’s membership has found that the average cost to shut down bars and restaurants is £2,425 while additional fixed costs, stock loss and furlough charges total £5,783 per week.

The typical grant support is only £693 per venue leaving a loss of £5,089 per week on top of the one off shut down costs, says SHG.

With some operators running as many as 20 premises, the total shortfall across the group – which has more than 200 venues - is more than £3.5m for the three-week period, it says.

“Clamping down on one sector is disproportionate, economically unsustainable and unviable for many hospitality businesses,” says SHG spokesperson Stephen Montgomery.

“We need a balanced approach from government and reassurance that restrictions are based on specialist knowledge, experience and credible data, which to date has been found seriously wanting.”

“UK and Scottish governments need to find an equal and fair way of allowing us to trade viably but in a safe and regulated way in comparison to the current restrictions which to have had the opposite effect.”

Relaxing of alcohol rules

Scottish restaurants and pubs subject to Scotland’s lower three tiers have been given a bit of respite with first minister Nicola Sturgeon saying they will now be able to serve alcohol indoors again from Monday next week.

Following a Scottish parliamentary debate on Sturgeon’s five-tier strategy yesterday (27 October), Sturgeon confirmed that premises in level 2 of its system can serve alcohol with a meal until 8pm.

Although indoor areas in level 2 regions will have to close at 8pm, businesses will be permitted to serve alcohol outdoors until 10.30pm.

In level 3 areas, which is likely to be most of the country’s central belt, premises can reopen until 6pm, but cannot serve alcohol.

Responding to Scotland’s new five-tier system, UKHospitality describes it as ‘not appearing to do hospitality businesses any good’.

“There are small reasons to be positive, but the continual restrictions, lack of time to adjust and uncertainty over support is a worry,” says UKHospitality executive director for Scotland Willie Macleod.

While he welcomes the new rules on serving alcohol, he believes their impact will be minimal.

“Relaxing the restrictions around meal service is a sensible step. As is the decision to allow alcohol to be served outdoors, although the time of year means this will probably not be a huge benefit,” says Macleod.

 “Again, we need to stress the importance of providing sufficient guidance and time to allow businesses to get to grips with new measures. Businesses need to plan, order stock, communicate details to staff and that all takes time that they are not being given.”

“It is vital that businesses know with certainty that adequate financial support will be made available over the duration of the five-level system to compensate business forced to close either through legislation or lack of financial viability. The sector has spent an estimated £80-90 million making premises safe and able to welcome customers.

“There are huge costs associated with closure, too. Businesses are spending around £10,000-15,000 per week just to stay closed. Financial support must be expansive and reflect these realities.”

Related topics: Legislation

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