Omicron: what do hard-hit businesses need on top of Sunak’s £1bn package as uncertainty cripples Christmas takings?
Fears over the rapidly spreading Omicron COVID variant and the ensuing advice to avoid mixing unnecessarily has hit businesses – in particular, the hospitality industry - very hard.
But the sector is facing massive uncertainty yet again. Things were looking a little bleak even before the latest mutant strain of coronavirus emerged, with one in five small businesses expecting to go under without a bumper Christmas this year. And one in three owner managed businesses say they are likely to make redundancies according to this report.
Professor Chris Whitty, the chief medical officer, urged people to prioritise only those social interactions that really matter to them, sparking a flurry of cancellations at restaurants, and pubs, and other venues to avoid the risk of COVID isolation over Christmas.
Too little, too late?
Businesses argue that while a cash grant of up to £6,000 available each week for each of their premises is appreciated, it doesn’t go far enough.
The British Chamber of Commerce has suggested the following measures:
- Reduce VAT for hospitality and tourism back to its emergency rate of 5%
- Reinstate 100% business rates relief for retail
- Make additional grant funding available
- Reintroduce furlough and reinstate the 80% scheme
- Further support for businesses that have accessed government loan and tax deferral schemes
What are people saying?
According to the BBC, the hospitality industry has estimated December takings will be down by 40% - with the damage up to twice that in London.
David Trunkfield, hospitality and leisure leader at PwC, is more optimistic: “Although in the short-term pubs and restaurants may lose custom, there are no real restrictions on how they operate, unlike in last year’s lockdowns and tier system. It is hoped that by implementing Plan B quickly, venues can look forward to normality in the new year, as more people receive their booster vaccinations…”
Plan for the worst, hope for the best?
As the COVID and economic landscape continually shifts, the hospitality and leisure industries are held in limbo with staff rostered, fridges stocked, beer cellars and wine racks full. They now face the prospect of failing to generate the revenue to cover those costs.
Should they cut their losses and temporarily close up shop, or push through in the hope that the Omicron wave swiftly subsides and trading returns to normal?
IRIS solutions can’t help you predict the unknown, but our planning and forecasting tools could help you prepare for the uncertain. For more details, visit this page.