The bosses of more than 90 restaurant businesses – including Pizza Hut, Pret, Itsu and Wagamama – have put their names to a letter calling on the prime minister to go further with its support for the industry.
The 90 signatories, which represent more than 1,000 restaurants across the UK, set out the need for swift action on key issues, such as slashing VAT on restaurant food and maintaining the Job Retention Scheme for restaurants whilst social distancing measures are in place.
The letter to Downing Street has been sent in conjunction with Deliveroo, whose own research shows that 75% of partners are concerned about making a profit while current social distancing requirements remain in place.
More than half of small and independent restaurants, meanwhile, claim they would be forced to permanently close within the next three months if the current situation continued.
Unless additional government support is provided, the signatories warn that the “shuttered restaurants in towns and cities across the country will be a permanent reminder of the damage this pandemic has done”.
They state that the crisis for the UK restaurant industry is far from over, with thousands of restaurants facing bankruptcy due to ongoing challenges posed by Covid-19.
In a detailed submission to the government, Deliveroo, based on extensive consultation with partners that include span leading national chains to small high street independents, has formulated a series of key policy proposals which would help the industry through this challenging period, adapt to the new economic environment and thrive in the future. These include:
1. Continuing support on staffing costs
The government should consider maintaining the Job Retention Scheme for the restaurant sector for as long as social distancing measures are in place, and to commit to subsidising wages of restaurant staff through the Scheme if they return full time.
These actions will give restaurants certainty and allow essential kitchen staff to work full time, despite lower sales levels.
2. Reducing tax burden
Re-opening at a reduced capacity will require restaurants to stimulate demand to maximise revenues.
To support this, Deliveroo calls on the Government to cut VAT on restaurant food for as long as social distancing measures are in place. Such a tax cut is the most popular policy measure amongst Deliveroo’s independent restaurant partners, with 75% saying that it would have a benefit to their business.
3. Taking action on rent
Nearly three quarters of Deliveroo’s restaurant partners are concerned about being able to meet rent payments in the near future. To address this problem, Deliveroo proposes a number of solutions, including ‘mortgage holidays’ for landlords to give financial breathing space to restaurants in the form of lower rents, and an extension of the moratorium on evictions for as long as social distancing measures prevent restaurants from operating at full capacity.
Other areas for proposed action include helping restaurants meet the cost of becoming Covid-secure, a government-led campaign making clear that restaurant food is safe and changes to planning law to enable restaurants to adapt operations more easily.
The signatories said they recognise the significant steps that the government has already taken to support the sector during the pandemic, but said their proposals take into account the “unique nature” of the industry as it strives to recover.
Deliveroo CEO and founder, Will Shu, said: “We are proud to be part of the UK’s restaurant sector, which contributes so much to the UK economy and local communities and is one of the most diverse and vibrant in the world. That is why we are urging the government to implement this package of measures to ensure that the UK’s amazing restaurant industry survives and then thrives.”