The NFU food chain team's role is not only to understand the market, but to work with it to support British farmers.
Bethan Cowell, NFU procurement and food service adviser
It certainly feels like a case of de ja vu… it's December, new restrictions are being implemented and the hospitality sector is once again experiencing high levels of uncertainty.
The past 19 months have had a huge impact on the hospitality market. From mandatory closures to social distancing, to lack of labour and wider supply chain issues, nothing has been trickier in recent history for our operators.
Rise and fall
Not long ago I was hoping to tell a more positive story – a story of increasing consumer confidence, increased sales figures and returning volumes.
In November the CGA, a leading data provider, reported that figures for the managed pub, bar and restaurant market were up by 2% on the pre-Covid-19 levels. A tentative but positive position for sales.
However, this fragile market is back to experiencing uncertainty when it should have hoped for the biggest sales figures of the year and the opportunity to claw back business that was lost since the start of the pandemic.
With consumer confidence tested, supply chain issues and increased costs, and significant uncertainty, many factors are affecting the market right now.
The impact of restrictions
As you can imagine, there are significant concerns regarding any new measures implemented. Last week, 130 pub and restaurant businesses in a joint letter accused the government of bringing hospitality to a “shuddering halt”. The letter set out the impact of new restrictions on the market and how, at this critical time of year, any negative impact will fundamentally dent businesses, which could lead to serious job losses and closures.
Crippling effect of cancellations
The BBC reported in the last week that, for one operator alone who runs four sites, they have experienced over 3000 cancellations for December. However, it is not just cancellations. No-shows are crippling to businesses at any time of the year but specifically in this important month.
Furthermore, the Confederation of British Industry (CBI) has recently called for more financial measures for the sector to alleviate the pressure of such uncertainty on operators.
Therefore it was great to see the announcement on 21 December that businesses in the hospitality and leisure sectors in England will be eligible for one-off grants of up to £6,000 per premises, plus more than £100 million of discretionary funding will be made available for local authorities to support other businesses. Some positive news for a fragile market.
Food inflation
Wholesale costs and supply chain issues still are very much at the heart of business issues, with challenges around wholesale prices and access to labour. In October it was reported that food inflation reached 14-18%, which will impact operators when they are wanting to entice consumers back into their sites.
United voice
Finally, it is hugely important for everyone in the supply chain to stand up together.
At our recent food summit, the NFU made the case for government to work with the food and drink sector to create resilient and sustainable supply chains.
The NFU also recently attended the Peach 20/20 conference and made the case for more partnership and collaboration between food producers and operators in the hospitality sector, to deliver more resilience in the future.
By all means, these measures won’t answer the problems that the market is currently experiencing, but at the same time, there are many opportunities for partnership in the face of adversity.