Scotland’s pubs and bars face unprecedented challenges with fears up to 12.5k jobs could be lost
The Scottish Licensed Trade Association has released a snapshot survey of the challenges facing Scotland’s pubs and bars, sponsored by KPMG UK. The survey contains key insights into the significant impacts of the COVID crisis on Scotland’s pubs and bars.
The survey which represents over 10% of Scotland’s On-trade premises, highlights that 45% of business owners do not expect a return to any sort of normal trading until a vaccine is found.
The survey also revealed that up to 25% of the 50,000 jobs in the sector could be lost and coupled with the introduction of reduced opening hours for many businesses and a subsequent reduction in working hours for staff, all jobs in the sector are effectively under threat.
Colin Wilkinson, Managing Director of the SLTA, said: “Our snapshot survey covers all types of licensed premises and is an indicator of the key issues facing the wide range of small to large businesses which trade within the wider hospitality sector.
“Our survey is based upon quantitative research from over 600 outlets covering the length and breadth of the country and is supported by major food and drink chains, independent pubs, bars and hotels in Scotland’s hospitality sector.
“The impact of COVID has been more severe for Scotland’s pubs and bars than virtually any other sector, and we now face the stark reality that up to 12,500 jobs could be lost as nearly 90% of premises report that their revenue is down versus last year, with 38% reporting revenue decreases of over 50%.
“Our own survey reinforces a recent survey by the University of Edinburgh on behalf of the tourism industry, which shows the devastating impact on employment in pubs, bars and the wider hospitality sector.
He went on: “Our sector has worked very hard to prepare for reopening and to ensure customers enjoy a safe environment. The average pub or bar spent £2,500 on training and social distancing measures, and this equates to a £15m investment across the entire sector.
“Also, many pubs and bars have adapted by making increased use of digital technology and offering restaurant quality food and cocktails for home delivery. However, with many people working from home, and local restrictions, one of Scotland’s major employment sectors faces unparalleled difficulties and the current business climate is leading to a real threat of permanent business closures and job losses.’’
The sector welcomed the support from both the UK and Scottish Governments, but notably support from Banks and UK Government had a higher rating than Scottish or Local Government.
Alistair McAlinden, head of hospitality and leisure for KPMG in Scotland, said: “It’s incredibly concerning, but not entirely surprising, to hear that so many licensed trade operators across Scotland are worried about largescale job losses and possible business failures over the next twelve months. The industry is facing a battle for survival and there will inevitably be some casualties.
“KPMG’s Economic Outlook research gives some cause for cautious optimism, forecasting that Scotland’s economy should regain lost ground in 2021, provided a vaccine programme is successful and rolled out quickly. But, for many pubs and bars, the crisis is happening right now and time is running out.
“The sector has worked tirelessly to reopen and rebuild consumer confidence. A collaborative effort and increased support from political leaders will be essential to ensure the industry survives an incredibly challenging few months ahead.
“As part of this, KPMG’s multidisciplinary team are already supporting a number of licensed trade operators as they seek to navigate their way through these financial headwinds.”
Colin Wilkinson concluded: “The SLTA, is currently celebrating our 140thanniversary, and has been the voice of the independent licensed On-trade in Scotland since 1880. Right now, our industry is fighting for its survival with many businesses on the precipice of business failure.
“The sector is a critical part of Scotland’s tourism and food and drink economies and we urge UK, Scottish and Local Governments to provide continuing support for our pubs and bars and protect the jobs that they provide directly, and the associated jobs in the wholesaling, brewing/distilling and food producing sectors.”
Key Findings
- 63% of businesses are employing less people now than in January (a traditional quiet month), and it is forecast this will increase to 70% less employees by Christmas.
- 45% of businesses do not expect a return to normal trading until a COVID vaccine is found.
- 85% of outlets are seeing a downturn in footfall and 89% in revenue.
- 38% have seen revenue drop by over 50% versus same period last year.
- There is evidence that venues in rural and tourist locations are faring slightly better than in urban areas with 77% showing a revenue decline versus 89% nationally.
- Retailers have spent significant sums on preparing to meet social distancing standards, with an average investment of £2,500 per outlet, which equates to £15m across Scotland’s pubs and bars.
- There are major implications for employment.
- Most respondents felt positive about government support provided, but notably support from Banks and UK Government had a higher rating than Scottish or Local Government.
- The Eat Out to Help Out scheme was well received amongst those serving food with an enthusiasm to extend.
- Retailers have adapted to new ways of working and serving their customers with 43% increasing their use of digital technology and 35% offering food for takeaway.
