Really good webinar with interesting debate and themes including
o Govt messaging on the crisis is crucial – it will determine customer confidence going forward.
o Customers will not readily go out without having ‘permission’ to do so
o They will return cautiously and favour those brands who have done ‘good things’ during the crisis.
o Frequency will be lower, and guests will need precautions in place e.g. free hand sanitiser
o There is a lot of consumer affection for the sector
o Are exploring reduced trading hours ( but, can they still be profitable?), reducing menu items and drinks lines, using IT more effectively, promoting delivery and having simpler operations
o Many will not be able to breakeven due to social distancing, resulting lower capacity and sales reduction. Lots of businesses go under coming out of recession
o It is likely that over 30%+ of sites will be closed permanently. CVA’s are going to be used extensively
o “We need customers back”. If social distancing is in place at Xmas it will be disastrous
o This situation will require a 2 to 3-year plan.
o Still think this sector is attractive. Whilst a number of existing operators will go under, others will survive, and many exciting new brands will emerge from the situation.
o This will all take time though and the market will be in a different shape when it re opens vs 2019
o A change is needed (from an operator’s perspective) in rent calculations: turnover rents, risk sharing, equity share, rent paid in arrears, JV’s, shorter leases, no onward upward clauses and capital growth share. Base rents will need to be lower
o Landlords do not want to make long term decisions. Will need to be more partnerships going forward but not to the extent of stifling entrepreneurship
o They feel as if this has been a game of pass the parcel and they have ended up with the parcel, but no one has taken off any paper since the game started. Who are they meant to turn to? They have to pay interest too and have investors
o “There is a cauldron of angst between landlords and operators”
o There is a challenge around labour. Will European workers be there for the open up?
o Will think first about restarting public transport and getting people back to work – and only then will they start to really consider easing restrictions in our sector
o A belief from operators that the Govt will have to sort as they closed the sector down. “ They need to step up”