With Northern Ireland and Scotland under less stringent restrictions, England will enter a second lockdown from Thursday (5 November). That would entail all but essential businesses – such as food shops and supermarkets – being forced to close doors to sit-down visitors until Wednesday 2 December. Foodservice, hospitality and food-to-go sectors could take a substantial hit to sales for another month of 2020, although online orders and takeaway services may offer a lifeline.
Last week, financial adviser Oghma Partners warned that a second lockdown would result in long-term problems for suppliers to the foodservice and food-to-go sectors. Partner Mark Lynch that the longer restrictions went on, the more businesses that were likely to go bust.
He also warned of the damage caused to mergers and acquisitions within the food and drink industry, a trend set to continue in to 2021.
Reduced costs for employers
Alongside the lockdown announcement, the Government also revealed it had extended the Coronavirus Job Retention Scheme for a month. The cost for employers of retaining workers will also be reduced compared to the previous furlough scheme, with businesses only asked to cover National Insurance and employer pension contribution.
Businesses forced to close due to the lockdown will also be eligible to receive grants up to £3,000 a month under the Local Restrictions Support Grant, with a further £1.1bn given to local authorities to help support businesses more broadly.
Chancellor of the Exchequer Rishi Sunak said: “I have always said that we will do whatever it takes as the situation evolves.
“Now, as restrictions get tougher, we are taking steps to provide further financial support to protect jobs and businesses. These changes will provide a vital safety net for people across the UK.”
Responding to the Prime Minister’s announcement that England would enter a second lockdown, Ian Wright, chief executive of the Food and Drink Federation, said: “Confirmation that the furlough scheme will be extended is extremely welcome news for food and drink businesses who continue to feed the nation.
“However, we need further clarity that the food supply chain will be supported sufficiently. Without further reassurance thousands of jobs will be under threat as businesses consider closing their doors for good. The economic impacts of this decision threaten calamity unless we see further details of a rescue package in the next 72 hours.”
Meanwhile, Hilton Food group has reported continued growth in the past three months, as it benefits from increased consumer spending on home cooking in response to coronavirus restrictions.