Hospitality sales up 39.1% yesterday, versus -75% on the last day of trading in March.

Hospitality sales up 39.1% yesterday, versus -75% on the last day of trading in March.

Lockdown 2 versus lockdown 1

Analysis from S4labour shows that sales in the hospitality sector this week, Monday to Wednesday, were up 3.1%, 35.3% and 39.1% respectively, on last week, with tier 1 sites

up -9.1, 18.1% and 25.8% for each of the three days and tier 2&3 sites up even more at 25.1%, 63.4% and 59.3% respectively. This can only be described as a last rush to hospitality venues for a last visit before lockdown.

 

By comparison in the March lockdown sales dropped by 13.2%, followed by -45%, -60%, -65% and -75% in the days up to lockdown on March 20th when comparing with the week before.

 

Alastair Scott, CEO of S4labour and Managing Director of Malvern Inns commented: “I find the psychology of the second lockdown fascinating. Whereas in the first lockdown everyone wanted to follow government advice ahead of the lockdown this time the consumer reaction has been the complete opposite. This seems to demonstrate a lack of public support for the government actions. I suspect, or hope, therefore that when the industry opens up again it will be with immediate pent up demand rather than the rather timid excursions after lockdown no1.”

Extended Furlough

Extended Furlough

 

In Propel’s Friday’s Opinion I published our guidance on the Job Support Scheme (JSS) that was due to start on the 1st November but mentioned that the government website would publish further details before the end of October, assuming this might be refining some of the smaller details.  Unfortunately we got our Halloween nightmare – a second lockdown.

 

For our teams there is a lifeline in the extension of the Furlough scheme, with some slight changes. Our development team are now working round the clock to reverse the work we had put in place to cater for the JSS and revert to Furlough. We will be releasing an update to the software on Tuesday to reflect this.

 

So what do you need to know?

 

The scheme will operate for the month of November, after which the JSS will come into play (although don’t discount another change in plans). The Scheme will pay 80% of an employee’s wages up to a cap of £2500. The employer will foot the bill for NI, pension, holiday accruals and, if they would like to and are able to, topping up their staff’s wages. These are the same calculations that were applied in August.

 

The flexible approach is also continued, meaning that if an employee works then the employer pays for those hours and the scheme will cover the remaining hours up to their usual hours.

 

Eligibility has been extended to cover all employees that were on an RTI submission on or before the 30th October.

 

It is, therefore, assumed that for employees who joined your company and were not eligible for the original scheme will now be eligible, which will be a great relief to those concerned.

 

I am sure there will be further updates over the next week as the details are ironed out and we will keep you posted on these.

The effect of the curfew on hourly sales

The effect of the curfew on hourly sales

Analysis from S4labour shows that hospitality sales are 18.27% below what they were before the curfew, comparing week 37 & 38 to week 40 & 41 (before and after curfew).

When we look at the 18.27% decrease broken down per hour (graph below), each hour has been impacted which reflects the overall industry slump; a fall in consumer confidence since the curfew. The hours from 6am to 6pm are down on average 16.1%.

A noticeable impact has also been shown in hour 22 (9pm to 10pm) as it is down almost 40%, indicating that the curfew has not only has an impact after 10, but the run up until the time of closure. The place must be cleared by 10, and most people are likely to head home within the hour.

Futhermore, when you look at the food and drinks split between hours (below), it can be seen that food has been hit harder than drink. This is a reflection on a few things. Firstly, most places are unable to offer a second dinner sitting: whereas previously there can be an early, 7:30 sitting, and another can be fitted in later, this is now not possible, therefore food sales are heavily diminished. Secondly, if everyone has to be out by 10pm, it does not offer much opportuity to sell food right up until that time. No one wants to rush their evening meal, but ask someone to squeeze in a last drink at 9:30 and they will not say no.

Richard Hartley commented: “Overall the curfew has impacted sales, perhaps just when the industry was starting to get back on it’s feet.”

Last week’s sales like for like %

Last week’s sales like for like %

Analysis from S4labour shows that hospitality sales from last week were down 12.8% compared to last year, however when we take a closer look, sales in dry-led venues are up 16% on last year, yet wet-led venues are down 40%. Whilst London is still suffering more than the rest of the country, wet-led venues are also taking a big hit.

If we look at a little more detail, it can be seen that in dry-led venues, both drink and food sales are up compared to last year, whereas both types of sales are down in wet-led venues. What we can take from this is that people are increasingly going out for a sit-down meal with drinks rather than heading out to a pub or bar for a drink. It is also worth noting that roughly 10% of sites are still yet to open after lockdown measures were introduced, more of which are likely to be wet-led venues. This continued level of decline since March within wet-led venues is unprecedented and extremely worrying for the industry.

Chief Product Office Richard Hartley commented: “venues that are established as table service have an already adapted way of working, and greater consumer confidence, alongside much larger capacity with the given restrictions.”

 

 

A second look at sales, after the curfew was introduced.

A second look at sales, after the curfew was introduced.

Analysis from S4labour that hospitality sales from last week were down 21.2% compared to the week before the curfew (2 weeks prior), with sales of food down 19.1% and drink sales down 23.2% on two weeks before.

While weekly like-for-likes continue to fall, like-for-like sales are down 13.5% when comparing last week with the same week in 2019, with London suffering a 38.4% decrease in sales when compared to last year, versus a 5.2% decrease in the rest of the country. The figures suggest that London is adjusting to a new decreased level of trading, and that may take a while to recover. It is also worth noting that roughly 10% of sites are still yet to open after lockdown measures were introduced.

Chief Product Office Richard Hartley commented “This level of decline is unprecedented and worrying for the industry, although the weather may have played a part. As the curfew has been introduced, diners and drinkers will start to head out earlier, as a closer look at sales shows that a larger proportion of sales came in earlier. Behaviours may continue to change as we adjust to the new timings.”