The Sunday Times - UK (2021-12-19)

The Sunday Times December 19, 2021 5

fornia, he faced a laundry list of demands from desperate businesses. It is not just the hospitality trade that is under pressure. Travel businesses are reeling from the new Covid restrictions; high street retailers are suffering reduced footfall in the run-up to Christmas — Har- rods was among the stores starting their traditional Boxing Day sales early; and businesses generally fear a slowdown in the overall economy. “With monetary policy dealing with inflation, fiscal policy is now the main safety net against Omicron,” said Sanjay Raja, UK economist at Deutsche Bank. He suggested that the chancellor could issue grants for small hospitality, travel and lei- sure businesses hammered by the new Covid variant. Sunak might even have to reopen the furlough scheme, which was closed at the end of September — perhaps on more flexible and less generous terms than the 80 per cent of wages originally paid by the taxpayer. Raja said it might also prove cost effective for the government to intro- duce another state-backed loan scheme — such as the £50,000 bounce back loans — for small and medium-sized firms should they need additional cashflow. That would certainly appeal to some business owners grappling with cashflow issues, such as Sue Woodbine, managing director of Far and Ride, a company offering holidays on horseback. The Bed- fordshire-based business owner faces hefty monthly repayments on the loans she took out so that her travel agency could keep trading. By now, she had expected international travel to have recovered — but instead she is grappling with a wave of cancellations caused by new travel restrictions, such as the ones imposed by France on people entering the country from the UK. Agents have to repay customers on package holidays when their trips are cancelled. “It’s getting the cashflow — we need help,” said Woodbine, 71. “If the government would perhaps give us an interest- free loan for another year, that would help so many travel businesses.” For other businesses, the rising costs of importing from Asia — and extra paper- work as a result of Brexit — are key issues. Perry Burns, 67, director at the Electric Motorbike Company in Watford, said extra import costs were adding £400 to his £3,000 bikes. “It’s a huge inflationary pressure,” he said. Businesses like his took another knock last week when the government reduced grants for companies selling electric vehicles. “That just hits you again,” Burns added. He also has his eye on any hit to con- sumer sentiment caused by the resur- gence of the virus. On the one hand, any- one wanting to avoid travel by public transport might be attracted to one of his bikes. On the other, Burns said, potential buyers might equally be thinking, “ ‘Am I about to lose my job?’ or ‘Is my job at threat?’ ” should there be another eco- nomic downturn. For businesses in travel, retail and hospitality, Omicron’s pre-Christmas timing is awful. “It’s a critical time for trading, and the reduction of demand will have a material impact on cashflow going for- ward,” said Neil Devaney, co-head of the London restructuring practice of law firm Weil, Gotshal & Manges. The need to preserve that cash explains why some businesses are shut- ting their doors, particularly in city centres, where the government’s call to work from home “if you can” has reduced footfall. As an example, one big employer in

the City of London said that office occu- pancy had fallen from 50 per cent to 20 per cent in the space of week. Clive Watson, chairman of the City Pub Company, which has 45 pubs in the south of England and parts of Wales, said his central London sites were feeling most of the pain — and that those on Fleet Street and Old Street will be shut this week. “Sales are down 30 per cent across the estate. It is all about cash preservation now,” said Watson, 60. “We are trying to keep people on pay- roll, but apart from staff costs we will be slamming the brakes on everything.” Simon Emeny, chief executive of pub chain Fuller’s, told Sky News it was clos- ing 20 of its busiest sites “indefinitely”. Meanwhile Nick Mackenzie, 53, chief executive of Greene King, said that last Friday would usually have been the big- gest trading day of the holiday period. Instead, takings at some London pubs were down 70 per cent compared with 2019 — and in one case, 94 per cent. “Without immediate support from government, all the time, money and effort that was ploughed into saving our sector in 2020 may count for nothing,” said Mackenzie.

O

ther London publicans are also reporting tough trade. Keris De Vil- liers, 41, who runs three pubs in south London, took a private room booking for 60 — and just 16 turned up. “That’s more devastating than a straight-up cancellation [in some ways],” she said. “Because if you get a straight cancellation, you can at least not bring the staff in and you don’t spend the money on the food.” De Villiers summed up the views of others in her trade: that the mood was similar to the pre-lockdown sentiment in March 2020, when people avoided venues that had not yet officially been told to close. “It’s that limbo feeling.” Adding to the cash crunch for businesses, some landlords are already chas- ing their rent for December 24 — the quar- terly rent day. Sunak had been hoping to avoid offering any extra support to firms because they have not been ordered to shut down in England. But business organisations were making their case to the chancellor on Friday because of the impact on con- sumer sentiment of Omicron and the cau- tious views of England’s chief medical officer, Chris Whitty. Roger Barker at the Institute of Directors said: “Day by day, pressure is growing on the government to offer [support] to business.” If nothing else, it should “press the pause button” on the changes due in March. A Treasury spokesperson said: “We recognise how important the festive period is for so many businesses, and the government will continue to engage con- structively on how it can best provide ongoing support to the businesses and sectors affected.” But Matthew Fell, chief policy director at the CBI, saw a perfect storm coming in the months ahead: “There’s quite a high increase in input costs at the moment because of inflation, and a lot of the support measures are coming off. That’s why we’re saying the real focus of the government ought to be on cashflow.” That could not come too soon for businesses such as the restaurant run by Roux. “I feel like I’m already in a lockdown — my restaurant is empty.” Additional reporting: Sam Chambers

David Smith, page 11

The wave of cancelled bookings blighting hospitality has left beleaguered restaurateurs suddenly left with thousands of pounds’ worth of unsold turkey, spuds and brussels sprouts. What happens to all that restaurant-quality food? At most establishments, restaurant staff simply share it out among themselves, binning whatever they cannot eat or store at home. Some ends up being re- sold to the public via home delivery services such as Deliveroo as restaurants switch back to lockdown mode. But in other cases, chefs and managers are finding new ways to make sure it does not go to waste. Too Good to Go is an app that allows restaurants to sell their surplus food to the public at discounted prices. Under the app’s rules, they cannot sell for any more than a third of the menu price — so it is not a profit-making recipe. But it does at least recoup some of the overhead. Shoppers using the app buy “magic boxes” of mixed food items — in effect a lucky dip where customers have no

As restaurants shut up early,

where will all the food go?

Amid the surge of cancellations, some may find bargains among unsold meals, says Jon Yeomans

founder of Hoxton-based Humdingers Catering, estimated that in the week leading up to Christmas, he had gone from 25 engagements a day to just one. He said: “I’ve got 100 free-range turkeys sitting in my massive walk-in fridge, waiting to be eaten.” He will this week operate a soup kitchen in east London, where he hopes to serve 2,500 free roast dinners. Similarly, Ibrahim Dogus, who runs several restaurants around the London Eye, has teamed up with the neighbouring Park Plaza hotel to turn unsold food into meals for the homeless and vulnerable. “Ninety-nine point nine per cent of our bookings have cancelled — there is literally no one around,” he said. In Cumbria, Tania Buxton of Ginger Snap Catering is reeling after more than a third of a wedding’s 134 guests cancelled. She has already ordered all the food — including a salmon starter, a beef main and chocolate pudding — and will have to charge for it. “Unfortunately, unless we can find an outlet for it, that food is going to waste,” she said. David Moore, owner of Michelin-starred Pied à Terre, said: “Food waste won’t be a problem for us. I’ll just take it home.” Additional reporting by Jill Treanor, Jim Armitage and Sam Chambers

Bank of England set to tighten crypto rules

The Bank of England is to step up talks next year with its international counterparts on a regulatory regime for fast- growing crypto assets. Sarah Breeden, executive director for financial strategy and risk at the Bank, said that moves by banks to offer cryptocurrency trading and custody services to clients meant that global regulators needed to design rules to protect the financial system. The Bank of England faced “challenges” in finding data on cryptocurrency holdings by institutional investors, she explained, and international co-operation was required to establish the sale of investments by big holders. “The ability to get data on what institutional investors

are [holding] is a challenge,” she said. “This is not something the UK can solve all on its own.” This was work, Breeden said, that would be discussed by the Financial Stability Board — a body that unites central banks globally, including in Japan, America, Europe and Australia. While the Bank has said the risk posed to the financial system by the cryptocurrency market is limited at present, it wants to know more about the sector’s growth. Some 2.3 million Britons own crypto investments but their holdings are typically small. If the value of all these stakes collapsed to zero, it might prove painful for the individuals — but would not have an impact on the system as a whole.

Jill Treanor

traditional New Year chill after a Christmas season that’s been blighted. Despite Omicron and last-minute government guidance, retailers expect Christmas sales to be much better than last year’s. But there will be plenty of bargains in January, when late deliveries from China will be sold off at heavy discounts. As usual, buyers tempted by special offers on Black Friday will

T

he next six days should have been the most profitable of the year for high street retailers. Since it’s too late to order gifts online, the pavements would normally have been teeming with people desperate to find last-minute presents. They have cash to spend and fewer places to spend it. In a typical year, as stock flies off the shelves and the bank balance shoots up, every day feels like a cup final. This is not a typical year. The surge in the Omicron Covid variant — which could be infecting 200,000 people a day, according to the UK Health Security Agency — has once again cleared out town and city centres, and smashed the restaurant trade. It’s particularly painful for those who beefed up their resources this Christmas, hoping to claw back some of the past 21 months’ lost sales. Our Max Spielmann and Snappy Snaps photo shops see sales triple in

December, so we take on more than 200 temporary colleagues — or, as we call them, Christmas Elves — to help serve the expected flood of customers. Some companies pay a £1,000 signing-on bonus to get temps to work at Christmas. For many such people, this will be their first experience of work. Some stay on as full-time employees. Without them, we’d all miss a big chunk of sales. At our Timpson shops, only one service booms at Christmas: engraving. Up until the very last minute, customers come in, some clearly on the way back from the pub, keen to personalise a gift for a loved one. You would have thought dry-cleaning stores benefit in December as people dress up for parties, but they don’t bring their clothes in until after the New Year. The only service that does well in our Johnsons dry cleaning shops in December is the hire of carpet cleaner machines. People want homes to look their best with the family coming round.

We encourage colleagues to embrace the Christmas spirit — and it goes both ways. In December, grateful customers bring in chocolates, biscuits and bottles of whisky to wish colleagues a happy Christmas and thank them for their service. Reuben in our Huntingdon Tesco shop is a popular man: he has already received 18 gifts. We allow everyone to shut at 3pm on Christmas Eve but they’ll all be back by December 28, ready to serve customers. Sadly, in the following six days, turnover plummets, the VAT and rent comes due and we make a large loss. Clothing shops are busy with stock- clearance sales — but we don’t have any merchandise to clear, so lots of the cash we’ve taken in December goes straight out of the door. Even with the perfect plan, there are factors you can’t control, from sudden dumps of snow to changing government Covid rules. My heart goes out to restaurateurs facing the

discover that they should have waited for the January sales. While it’s the busiest time of the year for us, many businesses are entering a period of hibernation. Every festive season has three public holidays but the way they fall this year, with Christmas Day being on a Saturday, means many people won’t look at their emails for at least two weeks. While this is great for workers who need a rest, it’s frustrating for us, when it is business as usual. Every trade has a different approach to how it operates over Christmas. Most lawyers, builders, consultants and government departments close. They wish everyone a Happy New Year and disappear until January 3. The parliamentary recess is even longer, running from December 16 to January 5. Entire offices lie empty, no one answers the phone and should you leave a message, you’ll have to wait until 2022 to get a response.

Many factories prefer to cease production, using the break to maintain equipment, give the place a deep clean and avoid paying double time on the bank holidays. It’s often more efficient to give everyone time off together. Ebenezer Scrooge wouldn’t be happy, but for many workers, Christmas means quality time with their families. Meanwhile, millions will be spending Christmas Day doing their regular job, serving the public while others get to let their hair down. That includes everyone from the team in our local garage, who stay open every hour of the year, to nurses, chefs, firefighters, care home staff and police officers. If you can have a long Christmas break, read a book or escape to the sun. But spare a thought for those working at Christmas to keep it all running.

James Timpson is chief executive of Timpson Group

Spare a thought for the elves keeping shops running

A long Christmas

break is great for

some but for us it’s

business as usual

James Timpson

“However, if somebody had borrowed money against that, or if some institutional investors are holding that in their portfolios, that’s when you can get the kind of knock- on effects that matter to us as the financial stability authority,” Breeden said. “The closer those assets get to the core of the financial system, the more likely those knock-on effects are likely to be material.” The market value of crypto assets has increased tenfold since 2020 to around $2.6 trillion. While this is just 1 per cent of all global assets, the vast majority of those assets are in “unbacked” items such as bitcoin, which have no underlying assets supporting them. Crypto investments take three main forms: currencies

such as bitcoin, which are not backed by any assets; so- called stablecoins, which aim to hold a store of value more like a means of payment; and decentralised finance, whereby a loan agreed between individuals could take the form of a string of computer code. The Treasury has already proposed that the Bank should be involved in regulating stablecoins, but this system does not yet exist. The Treasury is working with the Financial Conduct Authority on what the regime should be for bitcoin. “We don’t have a regulatory framework that’s fit for crypto-coins yet, but what we are doing is rolling our sleeves up and getting ready to build it,” Breeden said.

emptying the fridges on Friday afternoon — owner Anthony Pender had decided to shut after takings dived. Now, £4,000 worth of food ordered in for Christmas revellers is going begging. Pender, 39, who is himself stuck at home with Covid, said: “This week, business fell off a cliff. There’s no point being open. We’re throwing away thousands of pounds’ worth of food.” The milk and vegetables are being donated to a food bank but the meat will have to be “chucked”. “Four weeks ago, there were warnings we were going to run out of turkey — now I’m throwing it away,” he added. Robert Hunningher,

choice over what they are given. Paschalis Loucaides, UK managing director, said the app had seen a surge in listings, including unwanted meat, fish, shellfish, Christmas puddings and even fancy cheesecakes, destined for an office party that never took place. “We’re seeing some amazing food [come through],” said Loucaides. Items available this weekend included a box of chocolates from upmarket confectioner Rococo for £6.70, reduced from £20. A “dinner bag” from family- owned Cocos Bar & Kitchen was on sale for £5. Rival app Olio, meanwhile, is braced for its busiest Christmas week ever. It has doubled the number of volunteers it uses to collect unwanted food from businesses to redistribute to users of its app. “We have been contacted by a number of companies that have had to cancel their Christmas party. The food was pre-ordered — there was nothing they could do about it,” said co-founder Tessa Clarke. One company donated 90kg of turkey in just one day last week. Other donations include trays of Christmas canapés. The effect appears to be most pronounced in London, where the Omicron wave is most acute. At the Somers Town Coffee House near Euston Station, staff were

An empty bar in London’s Covent Garden last week

I feel like I’m

already in a

lockdown

because my

restaurant is

empty

20% VAT in hospitality is set to return to its pre-pandemic rate from its level of 12.5%

6.6% Rise in the national living wage from next April

1.25% Increase in national insurance contributions

6 Selfridges, for many years the most eye-catching gem in the Westons’ transatlantic business empire, is being sold to Thailand’s Central Group for £4 billion. Alannah Weston, 49, has chaired the department store chain since 2019, when she took over from her father Galen Weston, the retail titan who died in April. The Westons also own one of the high street’s less chic retailers: Primark. In 2020-21 the family’s UK charity gave away £98 million.

THE WESTON FAMILY £1.7 BILLION

6 Parker, 82, was one of the team who built up the retailer Duty Free Shoppers. The Rhodesian-born accountant made about £464 million when the Hong Kong-based business was sold to LVMH in the 1990s and since then Parker has focused on the Oak Foundation, his wide-ranging philanthropic group that has branches in the UK, Denmark, India, the US and Zimbabwe. Starting out by making grants to Danish organisations supporting single mothers and torture victims, Oak now runs six main programmes, including ones designed to prevent child sexual abuse and address homelessness. In 2020, Oak donated $24 million to help

in the fight against the pandemic: the figure included $100,000 grants for the Glasgow Children’s Hospital Charity and the Guy’s & St Thomas’ hospital trust in London.

ALAN PARKER £1.9 BILLION

6 Hohn, the son of a Jamaica-born car mechanic, is one of the world’s wealthiest hedge fund managers. He and his ex-wife Jamie Cooper set up their Children’s Investment Fund Foundation (CIFF) in 2002. The pair set out to build a charity that adopted a “rigorous, business-like approach” to improving the lives of poor children from developing countries. An early project involved helping child Aids victims. Last year CIFF donated $347 million; among the recipients was a project to help educate 300,000 girls in India. Hohn is vocal about the threat of climate change and once gave £50,000 to Extinction Rebellion.

SIR CHRIS HOHN £1.3 BILLION

Beneficiaries over the past year have included London’s National Theatre, which received £1.5 million, and the Museum of Science and Industry in Manchester, which was handed £1 million. But the Westons have long been praised for the breadth of their philanthropy, making lower-profile — and highly effective — donations to churches and other small organisations. There have been more than 2,000 British beneficiaries of these in the past year alone.

The Sunday Times - UK (2021-12-19)

Get our desktop app

Company

Features

Documentation

Resources