US economy

Last orders at 10pm will be the last straw for struggling pubs and restaurants


There are few industries in which the chasm between the front-of-house experience and life behind the scenes is wider than in hospitality.

To create the mouthwatering meals savoured by carefree epicureans, restaurateurs, chefs and cleaners have to put in back-breaking 12-hour shifts in sweltering kitchens. Every convivial evening among friends in the pub is fuelled by sweat, bleach and elbow grease. Costs are high and profit margins wafer-thin, which means even a slight downturn in trade can have devastating effects.

What’s more, customers are fickle. Today’s flavour-of-the-month gastropub or trendy boutique hotel is tomorrow’s unfancied leftovers. To walk that tightrope, business owners need plenty of raw business acumen but also something less tangible. They must know their patrons inside out, anticipating what they want before they know they want it. Throw in a pandemic and, no matter how finely tuned those instincts may be, the equation no longer squares.

With the possible exception of air travel, hospitality has been as hard hit by coronavirus as any sector. Pubs, bars and restaurants were closed for months during the lockdown. Many have not yet reopened and plenty never will. There has been state support but it is simply not enough, and what is available hasn’t been evenly spread.

Restaurants and pubs that serve food, for instance, saw some benefit from the “eat out to help out” scheme and a VAT cut. Small community pubs that rely on selling drinks were left out. Large venues and pub and restaurant chains have been able to manage social distancing and table service. Cosy independent venues have often struggled.

There are other inequities too. Venues with a rateable value above £51,000 were not eligible for grant support, a cut-off point that disproportionately hits city-centre sites already wrestling with meagre footfall caused by home working.

Publicans who rent their venue from a large pubco have watched the rent they owe pile up, adding to the difficulties caused by the beer tie – the increasingly broken-looking model that governs the relationship between pubcos and tenants.

The hard slog that is hospitality means that business owners were already a pretty hardy bunch. They are also, by and large, blessed with the common sense you only get from balancing a business brain with a flair for psychology. But that’s why the 10pm curfew has provoked so many howls of anguish.

Venues have adapted fast to the pandemic, finding new ways to serve customers and cut costs. Many have become amateur epidemiologists, learning about the virus, deploying safety protocols and, for the most part, adhering to them with almost religious zeal.

The curfew, many feel, is not the result of similar diligence, or of common sense, but of classic political fudge.

Despite repeated opportunities to do so, the government has yet to offer a comprehensive explanation of the scientific evidence for cutting off trade at 10pm.

Scenes of people gathering in crowds on the street at chucking-out time have fuelled a sense that the measure isn’t just pointless, but actually counterproductive.

Nor has the government offered the only alternative – a comprehensive package of support to offset the policy’s impact.

Figures published by the Guardian last week showed that hospitality sales plunged after late-night trading was banned. Without comprehensive support, the industry said on Friday, nearly 300,000 jobs – about a third of roles in the sector – will be lost. And according to Labour, the job support scheme announced the week before by Rishi Sunak will do little to stem that tide.

Hospitality trade bodies representing more than 100,000 businesses have warned time and again that they are facing the bleakest of winters. Many in the industry now believe the government is leaving them to face it naked and alone.

Petrol forecourt tycoons pledge to pump £1bn into Asda. But will that help?

Asda heralded an “exciting new chapter” in its history of delivering great value for UK shoppers” last week as it announced its sale to a consortium consisting of petrol station tycoons Mohsin and Zuber Issa and the private equity group TDR Capital.

But can the new ownership really improve on the patronage of Walmart, the world’s biggest retailer, which has been Asda’s proprietor for more than 20 years? The business prowess of the Issa brothers is not in doubt. Over the same time-frame as Walmart’s reign, they have created a £3.5bn fortune by turning a single filling station in Bury, Greater Manchester, into EG Group, with more than 6,000 sites. But do they really have the answer to Asda’s problems?

The rapid rise of Aldi and Lidl in the UK has robbed Asda of its advantage as the cheapest store in town. Its market share is down from nearly 18% in 2013 to 14.5%. Successive rounds of job cuts and last year’s row over a new employment contract have also spoiled its image of a friendly, egalitarian culture where staff are “colleagues”.

The new owners have promised to invest £1bn over the next three years, and a push into convenience retailing is the obvious place to start. EG already has Spar convenience stores on its forecourts and it would be straightforward to introduce the Asda name. But what is the plan for the superstores, where profits are going backwards, and the company has started turning over excess space to the likes of B&Q?

Walmart wanted out of the UK for good reason. The grocery market is highly competitive and it would have had to throw big money at Asda to turn the third-placed player into a winner. Let’s hope for Asda’s 146,000 employees that this is a private equity deal, and a chapter, with a happy ending.

America needs jobs – and for that it needs a Democrat to win

In the US, just as in the UK, pressure is building to combat a second wave of Covid-19 with a boost in public spending. President Donald Trump, before he tested positive for the virus, pressed for an injection of funds to match the $1tn (£770bn)-plus Congress committed in April, despite saying the recovery was “pretty amazing”.

In truth, the recovery has been less than amazing in many ways, not least the response from US employers after the country was gripped by the biggest rise in unemployment since the Great Depression.

Last Friday, non-farm payrolls, which measure the bulk of the US jobs market, increased by 661,000. This sounds like an impressive number, but it fell short of an expected 859,000 rise and significantly below gains of 1.5 million in August, 1.8 million in July and 4.8 million in June. When employment overall remains 10.7 million below February’s levels, the narrative is one of stalled recovery.

Worse still, employers have disproportionately re-hired white adult males, while young people, women, Latinos and black Americans have remain out of work. The unemployment rate for white adults was 7% in September compared with 12% for black people, 10% for Latinos and 16% for teenagers.

Stock markets are already nervous about a second wave, and the ability of the US government to protect vital industries and promote economic growth.

Investors who have spent the past four years cheering the Trump administration’s corporate tax cuts are becoming concerned that posturing politicians can wreak terrible damage in a pandemic. Yet stock markets, if they could vote, would probably stick with Trump, even though he would continue to enrich a small elite and fail to invest in the broader economy.

For jobs to return in the numbers needed, while being more fairly distributed and rooted in new, greener industries, the US needs a Democratic administration. It’s not a panacea, but it would be a start.



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