Covid-19: Hospitality Industry

Mark Pawsey Excerpts

Wednesday 24th March 2021 Commons Chamber

[Mark Pawsey (Rugby) (Con)]

May I draw the House’s attention to my entry in the Register of Members’ Financial Interests? My hon. Friend the Member for North Devon (Selaine Saxby) has eloquently set out the substantial measures that the Government have put in place to support the hospitality industry, but where a sector is affected, there is also a massive impact on its supply chain. Over the past eight months, consumers have purchased their food in supermarkets. They have moved from out-of-home to in-home consumption, and supermarkets have done well, especially those selling foods, wines and beers that were previously available only at people’s local pub or restaurant.

There is an assumption that suppliers to the hospitality industry have been able to pivot to create products for the retail sector, but that is not the case. Many product lines are dedicated to hospitality, which has led to many suppliers losing stock through its going out of date and being wasted. Large quantities of cask ales have been poured away. Even when goods are not date-sensitive there are seasonal stocks, and suppliers have found that capital has been tied up in stock in warehouse space.

Wholesale suppliers work in high-volume, low-margin businesses with high fixed costs, meaning that a small fall in sales has a disproportionate impact on profitability. Many suppliers also have the challenge of customers who are unable to pay. Cash sales from one period are often used to pay suppliers for goods delivered in the previous period, and to that extent, many suppliers to the hospitality sector are acting as banks and funding their customers. Suppliers are unable to take action if a hospitality business simply does not have the cash.

I do not call for specific support for suppliers. The best outcome for suppliers is for their customers, and the hospitality sector, to get trading again. The road map out of lockdown gives us the date of 12 April for reopening outdoor hospitality, but that will be available only to limited outlets, such as those with pub gardens or big areas of pavement space in front of them. Therefore, 17 May, when indoor hospitality opens, will be a much more significant date. We know from previous experience that hospitality businesses can put in place measures to keep customers safe. They still have screens, which are often still in place, and they are ready with supplies of sanitiser and wipes.

The key date of 21 June is when all restrictions will be lifted. Some are calling for the dates to come forward. I think that certainty is more important than doing it early. All businesses need time to get their plans in place, so let us give them that certainty. I ran a business, and I do not see how it is possible to manage a business without knowing when the customers will be there to receive the goods. The hospitality sector is looking forward to getting back to business, serving its customers, getting staff back into work, helping to get the economy moving again, rebuilding its supply chain and bringing people together, which it can do in a safe and secure manner.