Counting the cost of reopening

Mark Wright • 15 May 2020

So, we have the first line drawn in the sand – Saturday 4th July 2020. On that date the Prime Minister has professed that if all goes to plan, we may be reopening the doors to our hallowed hospitality sector once more. How those pubs, bars, restaurants, coffee shops, cinemas might look when they reopen their doors is a point of much speculation and this will only intensify as the weeks count down to a possible reopening.

It is clear that much like huge swaths of the UK economy we need to reopen our doors, to once again have beer flowing through our dispense taps, food being served across the pass and coffee cups handed over the counter, (amd whisper this as not to upset some people) money going into our tills. The challenge to all operators is not that we must open, but how we open safely (both for our Teams and our guests) and how we open profitably.

That we will need to invest in increased PPE for our Teams is not in doubt; that we will in most likelihood have a lower venue capacity or depleted number of covers is more probable than not; that we need to consider how we demonstrate to our returning guests that we have their safety as a paramount concern will  be a must; how we embrace new technology and what changes we make to our operational plans..….all of this will all cost money – and working capital is at a premium right now.

Financially the mounting cost of businesses surviving COVID-19 continues to escalate. The generous intervention of the Government through the introduction of the job retention scheme may have removed the short-term financial pressures from owner/operator’s door steps (and if you qualified for a business interruption loan or grant – even better), however not only is the looming apocalypse of landlord rent payments being due still at the forefront of financial planning, but the potential costs of reopening are certainly not to be sniffed at.

Across the country in notepads and on laptops will be various calculations on cash-flow projections and break-even points, with scenarios around how different percentage decreases in trade affect x, y and z. For some the bottom line to those projections will be frightening, and in some cases not only will the additional cost of reopening be worrying, but the of cost of reopening at all in a post lockdown economy may simply be too much for some.

Will seven weeks to go and no firm announcement on legislation and operational requirements prior to reopening the light at the end of the tunnel is dimming, clouded in uncertainty. Financially some simply will not make it to the end of the tunnel, seven weeks out or not; for others their journey may already be coming to an end; for a few the doors are already closed – for good. The cost of continuing already too high of a price.

It is difficult not to be paralysed with the degree of uncertainty that exists within the void of actual firm information. With seven weeks to go before the 4th July is upon us there is still so much we don’t know that we simply need to know. Most operators are looking for a period of 3-4 weeks to give themselves ample time to reengage their teams, make changes to their venues, introduce new safety practises and retrain their Teams; and to price up the financial cost of reopening.

Financial worries, safety worries, potential legislation worries – where does it all end, and when do we get answers to ally these worries? A bad plan is still a plan. A flawed plan is still a plan. No plan, well no plan is a plan for disaster.

I’m sure the Government are more than aware of the questions we all need answers to – sector leaders and lobbyists and making sure of that – but we must have answers soon. We need their plan to allow us to complete our own, to go back to those notepads and laptops, to crunch the numbers again, to count the cost of reopening.

See you at the bar (sooner rather than later hopefully!)…...

Mark

mark@whamconsultancy.com

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