Government call for help is coming, but wholesale needs support first – Bielby
Over the next few weeks, the government is going to ask the wholesale sector to help it out of a hole. It’s a hole it dug for itself, through catastrophic mismanagement of its Covid response, short-notice lockdowns, poor communication and policy u-turns.
The public is desperate to go out and spend money in pubs and restaurants and no one desires that more than Chancellor Rishi Sunak, who wants hospitality, tourism and leisure outlets back in business and thriving as soon as conditions allow. The recovery of not just the out-of-home eating industry, but ultimately the entire UK economy, depends on him getting it right this time.
But it also depends on the wholesalers who supply and support that industry, as they will have to be one step ahead of the schedule of openings, with their shelves stocked, their vehicles ready and their staff un-furloughed.
Catering outlets that have been shut or ticking over on takeaway for months won’t just need stock, they’ll need credit and the usual extra services their wholesaler provides. They’ll need a helping hand as they negotiate whatever remaining restrictions limit their capacity.
Mr Sunak’s problem is that he’s done absolutely nothing to maintain that supply chain for the best part of a year and now it’s close to collapse in places.
In fact, he seems to have almost gone out of his way to offer financial assistance to everyone in food distribution except the group he’s relying on now to revive hospitality, restore jobs, and turn restaurant revenue into tax income.
The people he needs to get him out of his hole have traded throughout that time, many of them losing money steadily to do so. They couldn’t close, because they had schools, care homes and hospitals relying on them. The only assistance they had was that offered to every business – but the furlough scheme doesn’t reduce a wholesaler’s other overheads, like storage, refrigeration and vehicle leasing.
Local Authority discretionary funding was patchily administered and many were refused it, or received such small sums it barely made a dent in their mounting debt.
Sunak and his Cabinet colleagues also told wholesalers to stock up for a no-deal Brexit that didn’t happen, a busy Christmas that then got cancelled and the re-opening of schools, which lasted precisely one day. On top of that, a panicked Prime Minister took one look at the headlines and re-introduced free school meal vouchers, taking what small remaining income some wholesalers had and handing it to supermarkets.
Talk about kicking a sector while it’s down. And now the Chancellor is expecting the same sector to pick him back up.
We’ll do it, of course, but he’s got to show a lot more love for the wholesalers he suddenly realises he needs. That year of abandonment has depleted their cash reserves. They’ve got customers who haven’t paid and suppliers who are threatening not to supply unless they get their money. It’s a perfect cash/credit crisis just as the very moment they’re being asked to invest.
That’s why we’re telling Mr Sunak he’s going to have to finally put his hand in his pocket and give the wholesale sector the kind of support he’s lavished elsewhere, with a very minimum demand that he includes them in any extension of business rates relief.
He’s presumably good at maths and will be able to work out that a relatively small investment is essential to ensure the much bigger return that will come from the safe and successful revival of hospitality.Chief Executive coronavirus covid-19 Foodservice FWD hospitality James Bielby Rishi Sunak wholesaler