Yahoo Finance Stealth lockdown causing Christmas ‘disaster’ for pubs and restaurants, warns Franco Manca boss
The hospitality industry is on the brink of collapse as the Government urges people to slash social contacts without offering support to businesses, the boss of one of Britain’s largest restaurant chains has warned.
David Page, chairman of The Fulham Shore, which runs the Franco Manca and The Real Greek chains, said Christmas is becoming “a disaster area” for small businesses.
“I’m not sure any of the current Cabinet understands cashflow. Cashflow is the problem at the moment, over the last week or two and over the next 10 days,” he told BBC Radio 4’s Today programme.
Mr Page said while his company will survive due to its spread across the nation, smaller businesses will struggle: “Nearer London, and nearer city centres, these businesses have no cashflow. They are paying staff, they have got to pay suppliers, it is a bit of a disaster area for smaller businesses.”
He urged Chancellor Rishi Sunak to act rapidly to support those businesses now at risk. It comes after hospitality chiefs warned on Sunday that Mr Sunak has just 24 hours to commit to a package of support for businesses, or risk the closure of 10,000 pubs and restaurants.
Mr Page said: “This is lockdown by stealth and by Government advice to stay away from crowded areas, which may be a very good idea health wise, but it is ruining a lot of small businesses.
“The Chancellor had better get his act together, otherwise it is going to be a really horrible Christmas for our sector.”
Economists have warned omicron risks sending the economy into reverse, even without formal lockdown measures.
Samuel Tombs at Pantheon Macroeconomics said GDP in January will be at least 1pc smaller than in November as more people stay at home, despite no further restrictions from the Government.
“In this best case, we think that output in the accommodation and food services sector would fall by about 15pc month-to-month in December, followed by a further 5pc decline in January,” he said.
“We also assume that output in the arts, entertainment and recreation sector would drop by 10pc in December and a further 5pc in January, and that output in the transport sector falls by 3pc in both December and January.”
GDP in the third quarter of 2021 stood at almost £200bn per month, meaning a drop of 1pc equates to roughly £2bn of lost output.
If extra restrictions do come in, that loss could rise to 2pc, while a fuller lockdown could see the hit rise to as much as 6pc, according to Mr Tombs, equivalent to around £12bn.
Meanwhile factories reported stocks of goods fell at a record pace in the three months to December, according to a CBI survey, as companies struggle to meet strong demand when supply chains are still shaky.
The latest Covid outbreak threatens a repeat of the summer’s “pingdemic” which kept staff out of work.
“UK manufacturing demand remains strong, and output accelerated to meet this demand in December. However, behind the scenes, firms are battling pressures on a number of fronts,” said CBI economist Anna Leach.
“Stock adequacy of finished goods worsened to an all-time low for the second month in a row, and continued expectations for sharp price growth are a further challenge for the sector.
“The spread of the Omicron variant will have been a blow to business confidence. However, firms will welcome the Government’s decision to move from isolation to testing as a method of controlling the virus without unduly impacting their ability to operate.”
