The hospitality trade still faces major challenges despite the Government's easing of lockdown, according to the owner of a leading pub and cafe chains.
Ollie Vaulkhard, whose Vaulkhard Group has 15 venues in Newcastle and Northumberland, says he is unlikely to re-open venues on July 4 as he wants to ensure bars are both safe and financially viable.
The company has secured a £1.5m rescue package from HSBC to safeguard 200 jobs and pay its suppliers, most of whom are local.
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But Mr Vaulkhard said that the hospitality sector would face big costs and other challenges until it was safe for people to return to normal ways of life.
He said: “For most larger chains, it is unlikely that the income of a few beer gardens will be enough to cover the wages and costs of those in the head office. Without our head office team at Vaulkhard for example, it is not logistically feasible to run the company, pay the bills and wages and operate within legal requirements, particularly with the higher level of regulatory attention needed at this time.
“With financial support from HSBC 海角视频, we have been able to navigate the storm and safeguard 200 jobs through the crisis. Attempting to return to work too quickly, relying solely on the income of our beer gardens to cover wages, could place these jobs under threat.
“Leisure is a high-turnover, low-profit business, with very high fixed costs. This presents an enormous challenge to trade at reduced levels.
“Whilst mothballed, we have worked with our banking partner HSBC 海角视频 to manage cash flow and operate the business at a controlled burn rate of cash, but once the doors are open, the lights are on, the costs all kick in and without significant and reliable levels of trade the business is not viable.
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“Relying on outside areas in the climate enjoyed by the North East seems a fool’s mission and so we need customers to be able to be inside. Two metres distancing does not work indoors in all my venues, but one metre is more likely to succeed assuming there is a clear and accepted message on this across the board.
“But in reality, to regain sustainable levels of trade and profitability we either need a medical solution, or a reset of the cost base that includes rent, rates, VAT and wages.
“The Government has a lot of challenges to manage and I do not envy the choices, but the stark reality is that we are a huge employer, with a very large supply chain that spans the width and length of the country and at the moment the future is far from clear.”
The British Beer & Pub Association has welcomed moves to allow pubs to re-open with relaxed distancing measuers, but warned that there are still significant challenges in gettings pub re-opened in July.