Friday, 29 January 2021

After the storm

As I said in my previous post, “It may seem a distant pipedream at present, but the day will eventually come when the pubs are allowed to open again.” Planning for the future may appear inappropriate when set against the very high daily death tolls recorded in recent days, but to retreat into panic and despair and refuse to look forward would be irresponsible. It should be remembered that, During World War 2, the Beveridge Report was published at the time of the battle of El Alamein, and the 1944 Education Act was being debated in Parliament while the D-Day landings were taking place.

Although it is still more than three weeks away, the Prime Minister has stated that some kind of roadmap for reopening the economy will be produced on February 22nd, and the past few days have seen encouraging reductions in the number of positive Covid tests and hospitalisations. Assuming the vaccines prove effective, this trend should accelerate in the coming weeks.

However, it would be naive to expect any rapid progress in the sphere of hospitality. Over the past year, it often seems to have been treated as a scapegoat even when there was no evidence it was a significant source of infection. The main differences between Tiers 1, 2 and 3 were in how hospitality was treated. The impression has been given that government is largely indifferent to hospitality and sees it as something essentially frivolous, despite the fact that of itself it is one of the largest economic sectors and oils the wheels of the entire economy.

Even though most of hospitality has been closed for longer than it has been open since March last year, the amount of financial support provided has been distinctly grudging. If the government decrees that you’re not allowed to trade, then by rights it should compensate you for the resulting loss of income. Having said that, the overall level of borrowing that has been incurred is comparable with that needed to fund a major war, and our children and grandchildren will have to bear the burden of repaying it for decades to come. If interest rates had been at historic norms rather than virtually zero, that amount of borrowing would have been impossible, although arguably that unpalatable fact would have concentrated minds.

Looking specifically at the pub sector, the prospects do not seem at all rosy. During the brief window of relatively normal trading over last summer, the vast majority of pubs locally did eventually reopen, the exceptions mainly being ones whose future looked uncertain even before the lockdown. However, I would expect many more that are currently closed never to actually open their doors again, either under their current management or completely.

Last summer, even though capacity was restricted, few pubs seemed to be anywhere near full, and it was clear that many customers were still reluctant to venture out due to continued fear of infection, although the closure of other activities often linked to pubgoing such as theatres and sports venues also had a part to play. Licensees had to walk a tightrope between ensuring that social distancing guidelines were followed and avoiding going over the top with pettifogging restrictions. Sadly, quite a few seemed to fall into the latter camp and turned their establishments into profoundly unwelcoming places. After a winter of further scaremongering from the government, these fears will only be intensified when pubs do eventually reopen, and will lead to continued subdued demand for a long time to come. Indeed, it may never return to being as strong as it once was.

The past year has shown that making predictions is a very risky business, and I’m certainly not going to go down that road. However, on past form, it’s very likely that pubs will be one of the last sectors to be allowed to reopen. It’s probable that, at least initially, the old Tier system will be resurrected. One press commentator suggested that a likely timescale would be for most areas to go into Tier 3 on 8 March (i.e. “non-essential” retail allowed to open), Tier 2 on 6 April and Tier 1 on 4 May. That would mean that wet-led pubs had been closed for a minimum of nine out of the previous thirteen months.

There must then be a serious risk that the government would leave pubs in Tier 1 for a prolonged period. They could claim that the pubs had reopened, while ignoring the fact that they were still operating under such severe restrictions that both their ability to trade profitably and their appeal to customers had been seriously undermined. Tier 1 would be, for many pubs, a kind of living death.

Last October, I wrote about how the restrictions introduced in late September had meant the death of the swift pint. After they came in, I largely stopped going, whereas in the period from the beginning of July I had been doing so quite enthusiastically. This is echoed by this article in the Morning Advertiser in which a licensee argues that having to continue to operate under severe restrictions undermines the whole point of the pub:

As a wet-led pub, my stock-in-trade is the “pub experience”. I provide a haven for single people, people unwinding after work and people out to socialise.

The very nature of a wet-led pub is the socialising and the atmosphere. Any level of restriction has a massive impact on the experience and by opening with restrictions we are effectively destroying our own long-term prospects...

...People’s most recent memories of the pub is as a soulless place.

A pub should be a carefree place where people go to relax and enjoy themselves, not somewhere you’re being repeatedly questioned and hassled by both the staff and other customers. Going to the pub is a discretionary leisure activity; people aren’t compelled to do it, and and if they become sonewhere that is perceived as unwelcoming then people just won’t bother.

Back in December, I asked my Twitter followers to what extent they expected these restrictions to be lifted by the end of 2021.

There was a wide spread of responses, which were slightly skewed towards the more positive end of the spectrum. However, only 28.5% thought the restrictions would be completely gone, and 44.7% thought that most or all would still be in place. That isn’t a prediction, and I sincerely hope these fears are unfounded, but it doesn’t bode well for the recovery of the pub trade.

The Wickingman has also set down some thoughts on the issues surrounding the reopening of pubs here.

Edit: There is a report today that the government are considering abandoning the Tier system and opting for a single system of restrictions across England. While in a sense that might seem “fairer”, it would delay reopening as all areas could only proceed at the speed of the slowest.

14 comments:

  1. This whole saga has inflamed my pessimism for optimism's sake. Think the worst and anything above that is a bonus.

    Many pubs didn't really have the option or more specifically the time to even trade in Scotch Egg 2 before Tier 3 and then lockdown(s) were enacted again.

    Quite a few might not even bother if they aren't in Tier 1.

    We may have a summer (it'll be wet unlike 2020) but I can really see another Xmas lock down in 2021; publicans will be juggling throughout this year, or rather politicians will be juggling publicans metaphorical balls for quite some time.

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    1. I said at the time that there wasn't much point in pubs that didn't have an established food trade trying to put something on to enable them to open in Tier 2.

      We just don't know what's going to happen, so all we can do is sit and wait.

      I really hope I can get a haircut before Easter, though!

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    2. Luckily for me, a haircut is not one of the things I have to worry about!

      The pub experience with Covid restrictions was not much fun for customers, and pretty awful for the staff too. If they were being properly supported when forced to be closed, I'm sure a lot of them would prefer it - while missing their customers, of course!

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    3. I really feel for the staff, as well as the licensees. All that mucking around, all that worry that a customer is going to ignore the rules, the stress of catching the virus.

      My youngest lad is a barber in Manchester; he's bored rigid (I've asked him to walk round derelict pubs taking photos, but...). It's not just the money.

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  2. Abandoning the divisive, and often confusing Tier system would be my preferred option, but only if it doesn't take too long. The government should also adopt a sensible strategy when it comes to pubs, and hospitality - one based on proper consultation with the sector, rather than a load of half-baked ideas dreamed up by the control freaks of SAGE and PHE.

    The measures that pubs operated under after re-opening last July, seemed to work, but were then rendered unworkable by increasingly ridiculous restrictions, such as the 10pm closing, and Hancock's ludicrous "rule of six."

    As you referred to in the article, the Wickingman's suggestions would provide a suitable framework for allowing pubs to open in a way that is both safe and sustainable for the industry. It remains to be seen whether HMG are prepared to listen.

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  3. There will be an insolvency crisis and pub assets will be picked up for a song, most of them will change forever.

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  4. The rather misguided "Eat out to Help Out" initiative doesn't seem to represent scapegoating of the hospitality industry.
    And it doesn't need a PhD in epidemiology to suss that crowding sixty people into a small bar is likely to increase the transmission of airborne viruses.
    One upside of pub closure for me has been the discovery of many really good craft bears are available from specialised dealers. Just as well given what Brexit is doing to wine prices.

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    1. I thought you weren't going to comment on here any more.

      Anyway...

      1. There's no evidence EOTHO actually did contribute to a spread of infections. And its critics variously argue that it led more people to visit pubs and restaurants, and that all it did was to shift trade from later in the week. Both of these things cannot be true.

      2. As pubs were supposed to be implementing social distancing measures (and I didn't come across one that wasn't) there shouldn't have been sixty people crowded into a small bar.

      3. Brexit shouldn't have made any difference to wines from many highly-regarded producing countries such as Australia, New Zealand, South Africa, Chile, the USA etc. And last time I was in Tesco they seemed to have a wide range of French, Spanish and Italian wines at reasonable prices. Maybe some importers need to get their act together.

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    2. I am afraid that I so missed your deathless prose and impeccable logical analysis that I could not keep away any longer.

      1. Yes there is: Warwick University analysis https://tinyurl.com/y5jmq6rr.

      2. "supposed" is the key word there.

      3 FT thinks it will add about £1.50 to a bottle of European wine. https://www.ft.com/content/2747ddf8-7f6c-4b34-9e40-36d6c4178203

      Tesco will still be selling old stock or will have switched to cheaper vintages.
      New world wine won't, as you say be affected, but I do like a good Italian Chianti and specialised German wines.

      (Apropos your first paragraph I find it fascinating to recall that, as the bombs were blitzing London the IEE Committee on Electrical Installations were deliberating in a cellar - deliberations that gave us the ring main and the 13amp plug, still in use today)

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    3. Import duty on table wine is £10 per hectolitre, or 7.5p per bottle. So I'm not sure how anyone works out that it's going to cost £1.50. Like I said, some importers need to get their act together. (The article you link to is paywalled)

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    4. Sorry about that. It wasn't firewalled when I first accessed it but it is now
      However I will concede that the main way Brexit is affecting wine prices is through its affect on the exchange rate.

      As for EOTHO: just shows that you can always find something on the wed which supports your opinion.

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    5. Exchange rates fluctuate over time for all kinds of reasons, so you can't specifically blame Brexit for that. In any case, surely slightly dearer wine is a small price to pay for the country getting vaccinated far more quickly.

      And many on the Left have long argued that the pound was overvalued anyway :-)

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  5. Professor Pie-Tin4 February 2021 at 13:34

    As Kingsley Amis once said “A German wine label is one of the things life’s too short for.”
    If Brexit means the French stop exporting their over-priced co-operative swill then it will not have been in vain.
    Give me a decent New World wine any time ( although Spanish Tempranillo is my favourite grape of all. )
    Personally I'm still waiting for the M20 stack to arrive that Project Fear warned us about.We're into February now ...

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