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EDITOR’S VIEW: Seven days in which everything we took for granted about the industry was turned on its head

Andrew Seymour, Catering Insight Awards 2019

There is a phrase that get used a lot in this industry and it was created with the intention of demonstrating that, all things considered, the foodservice sector is a pretty impregnable business to be in.

In fact, I heard it only the week before last when a now-retired executive at one of the UK’s largest catering equipment manufacturer’s said to me: “The great thing about this industry is that everybody needs to go out and eat – cooked food will never go out of fashion.”

Today marks seven days since Boris Johnson urged the UK public to avoid pubs and bars – and on Friday he went a step further by ordering them to close altogether.

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In the space of just one week, the idea that the sector is impenetrable to outside forces has been completely turned on its head.

The government’s use of the word ‘unprecedented’ has been prolific, but there really is no other way to describe it.

If somebody told you this time last month that McDonald’s, Nando’s and most of the other household names associated with the restaurant sector would have closed all their stores and have absolutely no idea when they’ll reopen again, you would have laughed them out the door.

Never before, certainly not since the eating out market as we know it properly came to fruition, has the industry ever had to contend with something like this on such a scale. In many ways, that only makes things harder because, and sorry to repeat this word again, there is no precedent for it.

At some point, this will all be over. People will flood back into the pubs and restaurants again, normal service will resume. But nobody can predict what damage will be done in the meantime. Will the restaurant landscape still look exactly like the one we knew this time last week when it bounces back? Probably not.

Rishi Sunak announced a raft of measures last week to protect jobs and help businesses alleviate the cash flow pressures they face.

They have been roundly welcomed by the sector, but such schemes and mechanisms need to be introduced immediately to ensure firms can continue to trade.

VAT deferrals preserve some cash, but many businesses still face rent payments this week before the support is due to arrive. Banks and landlords will need to step in to help bridge the gap while companies wait for the government to get their ducks in a row.

There are currently more questions than answers, but the finer details of how the government’s employment measures can be accessed and implemented will begin to emerge in the coming days.

In the meantime, businesses whose existence depends on customers walking in, sitting down and eating meals must establish whether they have enough of a business model to generate sales from other channels.

The focus now will be on preserving costs, thinking outside the box and maximising delivery and takeaway.

With people restricted to what they can do and where they can go, one of the few bright spots will be the opportunity to order good food from restaurants and brands they know well.

UKHospitality estimates that the economic impact of coronavirus has put one million jobs at stake. That’s only at operator level. There is also the supply chain to think about, too.

It was reassuring to see the FEA, Ceda, Cedabond and Ense join forces last week to bring this very point to the government’s attention.

In a powerful letter sent to Number 10, they noted that the foodservice equipment industry supply chain is worth £1.3 billion a year and employs more than 10,000 people in the UK.

The majority of the businesses they represent are SMEs and are similarly unable to survive in the harsh commercial climate we now face. Operators have, in effect, stopped spending on equipment and the related services, and projects are being cancelled for the foreseeable future.

The four equipment bodies are calling on the government to ensure a number of things, including where operator funding is made available there should be a mandatory obligation to ensure that operator businesses meet their contractual payment obligations, in order to support the supply chain.

And they want supply chain businesses to have access to funding to bridge the gap caused by non-payment by customers. Support is needed to ensure that UK registered businesses are able to provide foodservice equipment for future government projects.

As they also rightly note, regular reviews of supply chain issues are required, and changes should be incorporated into government support proposals in order to ensure that supply chains do not suffer short term irreparable damage leading to loss of skills and experience.

Failure to do this will prevent effective recovery as and when the operator industry recovers.

Togetherness may be in short supply from a business perspective over the coming weeks as companies understandably focus on trying to keep their head above the water.

The entire foodservice ecosystem will be affected, from kitchen suppliers and installers to operators and service companies until this crisis is over.

Through this all, however, relationships that are important today to your business must be maintained.

Relationships within your immediate team are the most vital. Offices, factories and kitchens are places where support networks have always been vital. They will be tested and the most supportive and positive will emerge strongest.

The same is true of relationships between companies. Orders are likely to be scaled back and revenue will be lost. It will hit people in the pocket as well as the P&L.

Wherever possible, this pain should be shared. We must avoid the sort of psychology that is making some people empty supermarket shelves of dried pasta and toilet roll, regardless of how that leaves the more selfless people that are refusing to panic buy.

As an industry we will need to search for solutions rather than see some companies rush for small victories that cause once valuable partners to lose.

Recovery will be far faster if we are still dealing with the same customers and suppliers in three months’ time.

There is a theory that there are two ways to get ahead as an individual and a business: there are those that push down those around them to look like they have inched up. And there are others that work collaboratively and strain every sinew to nudge everybody forward.

I know which option most of us would prefer to see adopted.

Through these times, FEJ will continue to inform our readers about developments in the market, and we will still be speaking to suppliers and operators with a view to sharing best practice that benefits everybody. It is good to talk.

If you find yourself self-isolating, one thing you will not need to fear is whether your daily fix of industry news will reach you. Just check your e-mails every morning Monday to Saturday, and you will find us there.

I expect to be writing some difficult stories in the coming weeks and months, but if there is anything we have learned already it’s that these will be replicated in equal measure by tales of kindness, generosity and positivity as well.

I welcome you to contact me with those as we all fight on through this difficult time together.

Tags : coronavirusEditor's view
Andrew Seymour

The author Andrew Seymour

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