Share:

Restarting F&B

Paul Durkin • 01/07/2020

How will operators resolve the challenge of social distancing?

It looks like we have dodged “hazmat suit” hospitality, but the industry will have had 10 days to open safely following the announcement from the Prime Minister on 23 June. Martin Lewis’ summary captured it best: “Hairdressers can open, beauty salons can't. Cinemas can open, gyms can't. Pubs and restaurants can open, swimming pools and water parks can't.” He also queried the science - and one can question the logic - but either way, we have a staggered re-start in our sights. 


While Oliver Dowden, Secretary of State for Sport (among others) shared the government’s “aspiration to reopen gyms and leisure facilities in mid-July”, this delay is frustrating for both customers and operators, who sensibly reflect that it is easier to monitor safety measures in a gym than a pub. In a gym, customers can book time slots with strategically spaced workstations and regular deep cleans in the closed periods. The Gym Group has mentioned outgoing costs of £10m per month to run the business – they need to open and the public needs them, for physical and mental wellbeing.  

Restarting hospitality is in all our best interest: 25% of UK’s GDP drop in April was due to the hospitality sector being on hold, and, as Head of the Hospitality Union, Jonathan Down proudly states: "Hospitality is the UK’s 3rd largest private employer, creating 1 in 8 new jobs and 9% of all jobs – often first jobs for young people. Its economic contribution is £130bn annually (bigger than automotive, aeronautics and pharmaceutical combined) with tax receipts of £39bn.

The new “1 metre plus” rule enables scenarios where 2 metres is not possible if there are mitigating factors – such as masks and screens – together with table service and registering. This appears to be a guidance (not legally enforceable), so I have no doubt our entrepreneurial UK hospitality industry will find ways to embrace these conditions and make customers enjoy the experience. 

Hospitality is an art not a science, and confidence is everything. “We want [customers] to feel that they are in a nice buzzy environment, having fun… We don’t want them to feel they’re going into hospital and about to be operated on,” said Des Gunawardena of D&D London in the ES. How customers come back and how they are made to feel, may quickly be eroded with onerous (and possibly illogical) measures.  

In the Evening Standard Mark Davyd of Music Venue Trust has said only 13% of grassroots music venues could open with 2 metre social distancing, but it would be financially ruinous to do so. While the distance has been reduced, live music is still not to open on the 4 July “89% [of fans are] very eager to return to venues” (of 28,640 fans surveyed). The demand is there. Echoed by Cushman & Wakefield’s international teams (Beijing, Hong Kong, Seoul, Paris, Berlin) where anecdotally many of our colleagues are noticing F&B footfall is back to similar pre-lockdown numbers. 

Alfresco Revolution

In the UK we often longingly look to the alfresco lifestyles of our Mediterranean cousins and think they won’t work here, but we are less restricted by the weather than we realise. You only have to see how willing people are to support their favourite sports team on the terraces during the winter months. Note how our Low Countries counterparts have evolved and how they have dealt with reopening of F&B. We are restricted by a historic servitude to the car and draconian, outdated licensing rules for fear of public disorder. This is our chance to evolve.  

New York has now enacted it; with Mayor Bill de Blasio signing an executive order on Thursday 18 June launching the 'Open Restaurants' plan for outdoor dining. Removing bureaucratic red tape to allow restaurants to serve customers with outdoor seating options from parking spaces, gardens, and patios and pavements. In July, they plan to expand outdoor dining to open streets temporarily closed to traffic. This will allow 5,000 (of 27,000) restaurants to reopen, bringing back 45,000 jobs, de Blasio said.  

In London, Shaftesbury and Soho Estates are planning a Soho Summer Street Festival, with timed temporary pedestrianisation of the streets (weekday evenings and weekends from midday) to be filled with vibrant restaurant and bar seating during these times. The exciting project is supported by Westminster City Council (full “proposed intervention” list), but given the short notice until launch, can the restaurateurs properly prepare? 

VAT

Boris made no mention of any VAT cuts. I hope we follow Germany who cut the sales tax restaurant guests pay on food from 19% to 7% drawing sales back to pre-lockdown by 30th May (Sky News).

OpenTable restaurant bookings index 2020

Source: OpenTable

The FT suggested Rishi Sunak is considering a lower VAT rate for the tourism sector — including pubs, restaurants and hotels. We keep our fingers crossed. 

A Silver Lining

While lockdown has sadly seen the loss of institutions from Le Caprice, India Accent, HIX/Tramshed, the Ledbury, Rivington, Texture, Siren and EAT together with Whalburgers; the pandemic has merely accelerated the changes forecasted over the next 3-5 years. A restaurant is only as profitable as the amount of people it can physically cater for, and while some locations assist a brand, F&B operators are reluctant to take a loss for a prime site, note Wagamama, Chipotle, and Wahaca in Soho are all available. So, leasing a shell developers spec space to a restaurant on a 25 year lease and forgetting about it, only to collect the rent, may now seem naive. From an owner’s perspective, the restaurant must interact and work with everything else nearby, regardless of whether it is a stand-alone asset or part of a centre or estate, requiring intense asset management. 

Lockdown has shown us what we missed – our basic human need for social interaction accompanied by great food and drink. Chris Miller of White Rabbit eloquently spoke in City AM of the silver lining. “Downturns are where most successful hospitality businesses are made… rents are likely to adjust down and landlords will provide more favourable terms to attract the few surviving active players in the market. Expect to see capital contributions and turnover rents to attract best-in-class operators.” The question is: does the property world know this yet, and if they do, can they do anything about it? 

Latest COVID-19 articles

Cranes, Stratford East London
Insights • Office

Is This End Of The Development Cycle?

The lockdown measures implemented by the Government to control the spread of coronavirus have had a profound effect on office development activity.
Patrick Scanlon • 01/07/2020
Shoreditch coffee house
Insights • Retail

Restarting F&B

Restarting hospitality is in all of our best interests: 25% of UK’s GDP drop in April was due to the hospitality sector being on hold. We review the creativity and challenges involved. 
Paul Durkin • 01/07/2020
graph and numbers on blue screen
Insights • Investment

Will COVID-19 Affect Ownership Patterns for UK Real Estate?

Catalysts for distress, such as the COVID-19 pandemic, often lead to changes of ownership composition within the UK property market. Some investors see this distress as a buying opportunity whereas others will sell as assets re-price and risk perceptions alter. 
Jason Winfield • 01/07/2020
Birmingham
Insights • Commentary

Changing Our Planning System for a Modern Age

After the horrors of WW2, visionaries dared to plan a new and better urban future. The planning system was born. Now a new future beckons and the Government is about to shake things up. Read here 5 things they should do and why.  
Richard Pickering • 01/07/2020
Coronavirus / Covid-19 cases in Italy, Milan, Rome. (9.04.2020) Source: Center for Systems Science and Engineering (CSSE) at JHU
Insights • Workplace

COVID-19 & Data to Reimagine the Workplace

Despina Katsikakis, Head of Occupier Business Performance reveals the data driven trends around productivity, culture, wellbeing and diversity that will shape the future office.
Despina Katsikakis • 22/06/2020
man holding bank card in front of laptop
Insights • Retail

Will Moving To Online Kill Your Business Model?

Throughout the COVID-19 pandemic we’ve been told retailers need to move to online. But what if moving to online kills your business model?
Tim Crighton • 22/06/2020

Our Services

Retail and Leisure

A great retail proposition is only the beginning.

Learn More
Places

Urban places are the powerhouse of the UK economy, presenting both challenges and opportunities for those undertaking or planning property development and regeneration.

Learn More
Retail Leasing

With in-depth market knowledge spanning all types of retail property, our Retail Leasing team provides a tailored service to investors, developers, occupiers and public sector clients across the UK and Ireland.

Learn More
Retail & Leisure Occupier Representation

From small market towns to the largest regional shopping destinations, retail is at the heart of what we do.

Learn More
Retail - Capital Markets

Our leading Retail Capital Markets team provides advice, execution and investment services to a vast network of national and international clients involved in buying, selling, financing or developing retail real estate.

Learn More
Residential

Unprecedented changes are happening in the residential marketplace. This rapid pace is being fuelled by basic supply and demand dynamics, changes to economic and planning policies, a constantly evolving international marketplace and a crucial shift in attitudes to the sector both as an asset and an investment class.

Learn More
Automotive and Roadside Property

Automotive dealerships, fuel and roadside properties often create real estate opportunities that require a tailored approach. Whether you’re an owner, operator or investor, Cushman & Wakefield’s knowledge of the roadside sector can help you find the right solution – whatever the challenge is.

Learn More
Government Public Sector

As a leading advisor to the public sector we are helping the sector face some of today’s greatest challenges.

Learn More
Energy and Infrastructure

The total value of the energy and infrastructure sectors is larger than the whole of UK commercial property, with investment into infrastructure assets forecast* to hit £600bn over the next 10 years. Allied to this the UK government has become the first G7 country to commit to net zero carbon emissions by 2050 at an estimated cost of more than £1trn.

* Infrastructure Projects Authority

Learn More
Serviced Offices

The flexibility and all-inclusive nature of serviced offices makes them a potentially invaluable resource for organisations in any sector.

Learn More
Banking and Finance

Building the Real Estate Portfolio of Tomorrow to enhance business agility and efficiency.

Learn More
Media and Advertising

Prepare for what’s next by fine-tuning your real estate portfolio strategies with our Media Sector Group experts.

Learn More

Related Insights

Putney High Street, London
Insights • Retail

A New Era For The High Street?

For those dodging the daily commute, but without the desire or capability to work effectively from home the local high street may well become the new “office”. 
Paul Durkin • 02/06/2020
Knightsbridge, London during COVID-19 lockdown
Insights • Retail

Retail Quarterday Mayhem

As the ‘stay at home’ message crescendos, and lockdown sweeps the world, many sectors are feeling the economic crunch. Without the daily hustle and bustle on our streets, the physical elements of the retail and leisure market are facing a state of economic hibernation.
Paul Durkin • 08/04/2020
laptop screen displaying online restaurant delivery message
Insights • Retail

Retail Strains Shifts and Spikes

Early social-distancing measures for COVID-19 created a dislocation of “normal” consumption patterns, putting retail property at the sharp end of the immediate stresses and strains.
Paul Durkin • 24/03/2020
Insights • Retail

Trend Watch: Sky’s the limit for European Rooftops

Hackneyed as the phrase may be, ‘the sky’s the limit’ is for once literally true in the case of rooftop venues.
Matt Ashman • 03/12/2018
environment
Insights • Sustainability

Environment Outlook 2020

Currently, buildings are responsible for 40% of energy consumption and 36% of CO2 emissions in the EU, so it is critical that the real estate sector plays its part in helping achieve climate goals.

Andrew Phipps • 03/12/2020
person drawing a chart in marker on glass
Insights • Investment

The EMEA Investor Update

An update on the impacts of COVID-19 pandemic on real estate investment in EMEA. 
James Young • 05/08/2020
dna graphic
Research

DNA of Real Estate

DNA of Real Estate tracks prime rents and yields in 46 cities across Europe, covering the key office, logistics and high street destinations. It has an overview of quarterly performance, and a summary of prime rents and yields for the cities and markets.
Nigel Almond • 30/07/2020
woman leaping at Big Sur, California
Insights • Commentary

Is risk aversion more damaging than demand shock?

What does ‘risk’ actually mean? And do we have more to fear from these new risks themselves, or instead from the way that we choose to respond to them? 
Richard Pickering • 29/07/2020

CAN'T FIND WHAT YOU'RE LOOKING FOR?

Get in touch with one of our professionals.