Will Britain’s restaurants survive coronavirus?

You need not be blessed with the visual imagination of a poet to look at these pictures of restaurants across Londons Soho with their windows boarded up and cast them as people, their eyes tightly shut. In the days following the governments various announcements in mid-March leading to the current lockdown, chefs and restaurateurs had no choice but to lay off their staff, empty their kitchens of ingredients and put their businesses into enforced hibernation. It was a brutal but swift process. The question now being asked by the restaurant sector is, what happens when the pandemic ebbs away? What happens when the lockdown is declared over? Do the boards simply come down off the windows? Will all the UKs restaurants, more than 25,000 of them, simply reopen their eyes?

“Many have survived the closure,” says Sam Hart, who co-owns 11 restaurants in London including Quo Vadis and the four-strong Barrafina group. “The question is how do you survive the reopening?” Or, as Will Beckett of the nationwide Hawksmoor steakhouse group puts it: “Everyone is nervous about what happens when ministers go on television and say, tally-ho, lets get on with life.” As Beckett says, the scheme to pay 80% of staff wages up to £2,500 a month will seemingly be turned off. Costs will return. The big question is, will the customers?

A significant issue is the governments initiative to underwrite loans from the banks to businesses, with the proviso that those businesses be viable. Most restaurants, even apparently successful ones, run on a tight financial model, riding seasonal waves of trade, often with great peaks and troughs. The first three months of the year just gone are famously a major trough. Viable restaurants could easily be made unviable by the lockdown itself. “People think theres some pot of gold sitting in the bank,” says chef Angela Hartnett, who has the Michelin-starred Murano and three Murano Cafes scattered around central London. “But there really isnt. Restaurants are run on very tight margins.”

Chef Richard Corrigan, who has three restaurants including Bentleys off Piccadilly and the recently opened Daffodil Mulligan in Shoreditch, agrees. “If this was a three-month closure, wed get through. The real issue were facing is a six-month closure which, in the absence of any cash flow, will exhaust us.” Under the governments Coronavirus Business Interruption Loan Scheme, the banks have agreed to provide £250,000 without personal guarantees. But that, says Corrigan, wouldnt even touch the sides. “In the centre of London, youd need £600,000, which is an awful lot of debt. That in itself will make many businesses unviable.”

Similar calculations are being made elsewhere in the UK. Gary Usher of Elite Bistros, who has six much-loved restaurants across north-west England, including Sticky Walnut in Chester and Kala in Manchester, says he is trying to “remain positive” but its tough. For the moment his staff are dealt with. “If we hadnt had the 80% salary replacer, Elite Bistros would have closed.” The acute stage is over. Now the situation is chronic. “We have no money coming in and we still have bills.”

There is also the issue of rent which, on average, should be about 10% of a restaurants turnover. Restaurateurs report that some landlords have been extremely accommodating, by offering to write off up to three months rent. Others have been far less flexible. In late March the Financial Times reported that Criterion Capital, which owns large slabs of property around Londons Leicester Square, had threatened the 37-strong Caffe Concerto group, which occupies one of its sites on Haymarket, with a winding up order, because it had not paid rent on one site. Caffe Concerto director Stephano Borjak told the Caterer: “We are using our cashflow for wages. We urge our landlords to bear with us at least until we open for trade.” Criterions Andrew Sell told the FT: “We are driven to take such action because we are a business that has an obligation to our lenders, to collect rent and meet their demands for interest payment to be made on time … The property industry is being treated as the nations bank.” Kate Nicholls, chief executive of industry body UK Hospitality, says she has heard repeated stories of restaurant owners facing issues of this sort: “Too many landlords, banks and insurance companies are simply not sharing the pain of this.”

All of this feeds into anxieties around the prospect of reopening. “We will need between £15,000 and £20,000 just to restock our restaurants with ingredients,” say Usher. (Any ingredients left over at the shutdown were used in meals provided for free to the homeless in Chester.) And then theres the question of whether they will still have the staff with which to do so. Angela Hartnett shut down her restaurants even before the government had officially told her she had to. “Partly we did that to enable our staff, 80% of whom come from the likes of Italy, Spain and France, to get home to their families. Id like to think theyll still want to work for us at the end but I just dont know.”

But the bluntest of issues is: will there be any customers? As Beckett says, “There will probably still be a demand for social distancing at first.” And even if there isnt, peoples behaviour may well have changed. “With all this time at home people will have learned to cook more and take pleasure in it,” says Usher. “I simply wonder what peoples relationship with restaurants will be.”

One gastropub operator told me: “People think were in the food and drink business but were not. Were in the atmosphere business. The food is terribly important but its not what brings people in. Its about the social side.” And who will want to socialise after this? The optimistic view is that, after a lengthy lockdown, everyone. “There may be lots of people who want to go out,” says Hart. “But then again, lots of people have lost their jobs and will be absolutely skint.”

All the chefs and restaurateurs I spoke to described some form of staggered reopening to match the likely slow return of customers. “I could see us opening for a few services but not for all of them,” says Hart, “and expanding out from there.” Or as Usher says, “We might reopen one of our restaurants a week.” What will matter, Hartnett says, “is if restaurants looked after their regulars well. Then they are more likely to return.”

Obviously, the state also has a part to play. The restaurant business must get enough warning that the lockdown is coming to an end, says UK Hospitalitys Nicholls. “The government mustnt turn the taps off on the business support quickly. It has to be tapered or well be looking at mass unemployment across the sector.”

Is there any lighter news? Perhaps a little. Usually, if theres strife in the restaurant industry, its the small independents who suffer first. But theres good reason to think the smaller operations will find reopening more straightforward than the big groups. “Because were small, were adaptable,” says Max Gott of game-based restaurant Bistro 46 in Newcastle, which has just three full-time members of staff. “If we need to do some takeaway to get us through then we will. We shoot a lot of our own game so thats still there, and we deal with small suppliers who have moved to a delivery model for the duration.”

However, like everyone else, he wonders “whether people will still want to eat out”. Which brings us to the one thing we, the diners, can do. If we want restaurants to return to trading, if we want them all to reopen their boarded-up eyes, we need to give them our business as soon as we feel able to do so. Its as simple as that.


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