Wholesale facing “festive season like no other” – Bielby
All this and Christmas too. As the wholesale sector prepares for a festive season like no other, we find ourselves trying to make plans for a three-month period that involves a worsening global pandemic and the potential renegotiation of worldwide trading terms alongside the more traditional stockpiling of turkey and mince pies.
Our belief at FWD is that, despite their immense resourcefulness and experience, our members can’t mitigate for all three without direct and immediate financial support from government.
As FWD Chair Coral Rose predicted in last month’s column, the pattern of increasing Covid infection rates seen in other European countries has now been repeated in the UK, leading to further government measures to prevent the spread.
The 10pm curfew for hospitality venues will further test their profitability and it’s particularly odd that after a summer of supporting the hospitality sector and encouraging the public to do the same – and with little evidence to suggest that outlets which have adhered to social distancing rules are responsible for the approaching second wave – the government has abruptly turned its back on the pubs and restaurants it has spent so much money supporting.
Our members’ catering customers have benefited from the initial Retail, Leisure and Hospitality Fund grants of up to £25k; discretionary Local Authority Grants; a Business Rates holiday; the Coronavirus Job Retention scheme; the ongoing VAT reduction; and of course the £500m pumped into the sector through the Eat Out to Help Out scheme.
While wholesalers received no sector-specific aid, the public spending poured into their customer base and the option to furlough staff has kept them operational despite the months of near-total shutdown. Government quite rightly identified this sector as a priority for investment, both as a way to ensure food supply chains remain robust and to kickstart economic activity.
Now, just at the point where most of those measures are coming to an end and the sector is expected to stand on its own two feet, we are faced with tighter restrictions and the prospect of local lockdowns, short ‘circuit breaker’ national lockdowns and possible shortages in production and distribution as supply chain workers are forced to isolate.
In our regular meetings with government ministers, MPs and officials, we have explained you can’t switch off food supply like a tap. It relies on the movement of fresh, chilled frozen and ambient products in one direction, and cash in the other, and when it stops moving it’s not the public’s discretionary spend that’s threatened. It’s a vital service to the vulnerable, remote communities with few supply options and customer groups which cannot be under-supplied, such as schools, hospitals and care homes.
We have also explained that any amount of investment in keeping half-empty restaurants viable is wasted if they’re not buying stock from wholesalers and if you want to have foodservice outlets standing by for recovery at some point in the future, you also need to support the distributors who supply them.
So if the government is abandoning its previous tactic of ‘trickle up’ investment in our supply chain, we need to intensify our demands of direct support for food and drink wholesalers, starting with Business Rates relief and an extension of the furlough scheme for employers in the foodservice industry.
FWD members have done incredible things in the past six months, building home-delivery options, converting to digital platforms for ordering and payment, and supporting their customers through the most turbulent period any of us has experienced.
However, amid the predictions that as much as 40% of the hospitality customer base might not be active for months, there simply isn’t enough trade to go around, and as furlough comes to end this month, there’s a real prospect that we’ll see the redundancies and business closures that have haunted us since the beginning of the coronavirus outbreak.
As it stands, we don’t know what Christmas will bring, or what impact the ongoing Covid situation will have on overall demand.
The prospect of no deal with the EU stands beyond December and while we found ourselves on that cliff edge three times last year and have some idea of the preparation necessary, none of last year’s no deal deadlines coincided with the biggest food festival of the year. Last year the alternative to no deal was the status quo, not a new way of trading with our biggest partners.
One way or another, things will change and plans need to be in place. At the time of writing we still don’t know whether we need to be ready for no deal or for an agreed new trading landscape from 1 January.
It’s going to be a very demanding end to a tough year, but we’re pushing as hard as we can for the support you and your customers need.Brexit column coronavirus covid-19 Foodservice FWD column hospitality James Bielby no deal Wholesalers