Government risks 460,000 jobs without supplier support

Without additional government support 460,000 jobs across the hospitality supplier sector will be at risk, UK Hospitality has warned.

A new survey by the UK Hospitality Supplier Alliance shows hospitality suppliers have suffered an average decline in trade of 78%, with one in four not trading at all.

The survey also showed 69% of respondents make 75% or more of their revenue solely within the hospitality industry. With the UK on-trade in lockdown since 20 March, UK Hospitality said it was “no surprise” the circumstances have “devastated business”.

Pubs, bars and restaurants will be allowed to reopen in England from this Saturday (4 July). But UK Hospitality warned the situation for suppliers remain precarious, as many have struggled to access government support.

There are concerns that if the limited financial aid available is withdrawn while operators are still closed or trading at “historically low levels”, one in five suppliers (around 20%) would expect to close, while three in four (around 75%) would have to make redundancies.

UK Hospitality said with an average redundancy rate of 40%, that would equal 460,000 people out of work across the hospitality supplier sector.

The trade body therefore stressed the importance of extended government support for suppliers through a “lengthy and painful recovery” to avoid substantial job losses.

Suppliers estimate six months of support should allow them to avoid redundancies, while an additional month would alleviate the risk of businesses folding.

‘Critical point’

Kate Nicholls, UK Hospitality chief executive, said: “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 therefore 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 the 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.”

UK Hospitality is encouraging suppliers to contact their local MP to raise awareness about the need for additional government support.

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Author: Melita Kiely {authorlink}