The UK economy shrank by 2.6% in November, as a second national lockdown in England and tough restrictions across the rest of the UK hit growth.
The Guardian has spoken to three company bosses about the pressure they and their employees are facing as the second wave of the pandemic threatens to tip the British economy into a double-dip recession.
Urban Village Pubs, London
Business planning has become almost impossible for Ian Grundy, the founder of Urban Village Pubs, as the November lockdown and rapid changes to the government’s coronavirus restrictions have cost his business more than £1.5m in the past year alone.
“As we got to autumn and the tier system raised its head, effectively life became quite difficult. Not least because the rules changed every week as the government spun the bottle and decided what restrictions came out that week. It’s just become impossible to plan,” said Grundy.
The second English lockdown meant his latest venture, the Rookwood Village in Leytonstone, east London, opened for 72 days only in 2020, after his firm bought the derelict Victorian pub and invested thousands of pounds to reopen it in July for the first time since 2013. This was at least a little better than the first lockdown, just after Grundy bought it, when builders had just four hours on-site before it was boarded up again.
With eight pubs dotted across London’s suburbs and the south of England, Urban Village started operating takeaways to help maintain its presence. The money has helped, but does not cover fixed costs, despite support from the furlough jobs scheme and government-backed loans. Grundy feels hospitality is being unfairly targeted by lockdowns and needs urgent state support to prevent pubs closing for good this year.
“Rishi [Sunak] is saying: ‘Oh well I’ll make another announcement at budget in March,’ but you can’t run a business like that. We have no idea what we’re looking at and have possibly no income for the next three to five months. What we need now is the government to step up and enable us to plan for what happens.”
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Regent hotel, Doncaster
The November lockdown was tough for the Regent hotel in Doncaster after a year when 38 weddings had to be moved or refunded and crowds were banned from the final days of the town’s St Leger horse racing festival.
“No one is travelling, there are no salesmen on the road, and no one to visit, so everyone’s more or less on lockdown,” said the hotel’s owner, Simon Longworth. But unlike the spring of last year, when activity stopped entirely amid a rash of cancellations, the family firm started selling takeaway meals from its a la carte restaurant to help it survive. “We said we’re not going to let this beat us, we need to be on the front foot.”
With fewer travellers during the pandemic, Longworth, whose family has run the business since 1935, has now converted 20 rooms into rental apartments to maintain a steadier flow of income. But although selling takeaways has helped, it barely makes up for the loss of the hotel’s usual trade in the run-up to Christmas. Far from the 200 usual restaurant covers on Christmas Day, the hotel sold 78 meals at a third of the price, delivered to homes across Doncaster.
“Obviously we were looking forward to Christmas. And come the second lockdown, certainly in Doncaster we were hoping we’d get some kind of reprieve to allow us to open in December to keep us going. If we could’ve had a week or so of that, that would’ve been great. But it was not to be,” said Longworth.
“It’s a balancing act of how many more lockdowns can we go through and walking away from a business that’s been in the family for 85 years?”
Crow Wood Leisure, Burnley
Crow Wood health spa on the outskirts of Burnley has been losing £250,000 for every month it is forced to close by the government. With tough restrictions in place for longer in east Lancashire than most other places in the UK, the November lockdown only added to the challenge of staying afloat for Andy Brown, whose family has run the business for 20 years.
“We were under tier 3 and London was in tier 1, everyone all carrying on going to the pub and restaurants, we were locked down. It’s been horrendous. The whole levelling up agenda is, I’m afraid, just not there at all,” he said.
“We’ve lost about £7m in revenue. But it could be more – we’re not through it are we? We’ve still no indication of when we can open for business, when we might be able to open a bit, or at all.”
With almost 300 employees, and not operating takeaways from its three restaurants, the only revenue source is football, when top-flight football teams stay at Crow Wood’s 78-bedroom hotel when they have fixtures against Premier League Burnley or Championship Blackburn or Preston. “Otherwise we’re dead; we’re shut,” said Brown.
Brown, who has questioned Sunak on calls arranged for local business leaders by the British Chambers of Commerce, said the government needed to be clearer with its lockdown plans and provide more help for companies. “I’m not sure we can prepare for reopening yet to be honest, as we’ve been in this situation so many times over the last 10 months. You can’t trust anything Boris [Johnson] says.”
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