A British leisure company has revealed the challenges businesses still face amid the ongoing Covid-19 outbreak.
Rockpoint Leisure, in New Brighton, Merseyside, employs 150 people, in a restaurant, pub, barber shop and – more recently – an art gallery.
“We thought we saw the light at the end of the tunnel, but it turned out to be an oncoming train,” says boss Dan Davies.
It comes as UK Chambers of Commerce say UK businesses are in trouble.
“Business that kills the curfew”
According to the BCC, nearly half of UK companies are seeing their sales decline as they experience a sustained cash flow crisis.
Its quarterly economic survey found that business conditions remained weak in the third quarter of 2020, despite much of the economy reopening.
Businesses serving consumers, including hotels, and those owned by Mr Davies, have done the worst, he added.
The ‘oncoming train’ Mr Davies refers to is the government restriction imposed on bar closing times last month.
“The 10pm curfew is killing our business,” he says.
He said bars and restaurants were facing a tough financial quarter as they still had to employ door workers and other workers, but their trading hours were curtailed by the latest lockdown restrictions, including the new one. 10 pm closing time.
“The industry has a long, difficult winter ahead,” he said. “Many businesses in our industry won’t be open to the new year. ”
In addition to being a member of the BCC, Mr. Davies also serves on the board of directors of the regulator Institute of Licensing, and on the board of directors of UK Hospitality.
His business is regenerating the Victorian district of the seaside town of Wirral, and owns and operates a number of businesses including a restaurant, pub, barber and more recently an art gallery.
He said the business environment had been difficult since the lockdown, with him and his business partners having to invest more of their own money.
“The leave program and Eat Out to Help Out benefited our industry and then the new restrictions were introduced,” he says.
Cash flow issues
According to the BCC, despite the improvement in certain activity indicators compared to the start of the year, “trading conditions remain close to historic lows”.
Its survey looked at 6,410 companies, employing more than 580,000 people in the UK, and found:
- Almost half (46%) of companies reported lower UK sales, and just over a quarter (27%) reported an increase from the previous quarter
- For companies in the service sector – which makes up the bulk of the UK economy – cash flow remains at levels comparable to the 2008-09 recession
- Two-thirds (66%) of respondents in the hospitality industry saw a decline in sales and reservations.
Although the July to September period improved from the second quarter, the majority of companies continued to report sales declines or no change in the third quarter.
Social distancing restrictions
Adding to the overall grim picture, the BCC points out that most of its investigations took place before the Prime Minister announced in mid-September that a “second peak” of coronavirus had hit the UK.
He says the subsequent introduction of new national restrictions – such as those suffered by Mr Davies – and the tightening of local restrictions paint a worrying picture of trading conditions in the fourth quarter of the year,
Suren Thiru, Head of Economics at BCC, said: “Our latest survey indicates that underlying economic conditions remained exceptionally weak in the third quarter.
“The manufacturing sector saw the strongest improvements in the quarter, while consumer-oriented service companies, where social distancing restricts activity, saw more limited gains.
“The continued weakness in cash flow is of concern as it makes companies more vulnerable to external shocks, including further restrictions. ”
BCC Managing Director Dr Adam Marshall added: “Our results clearly demonstrate that business conditions remain fragile in the face of uncertainty, with the prospect of a difficult winter ahead. “