UKH study shows hospitality supply chain on verge of collapse

The UK’s hospitality sector supply chain is facing devastation with 324,000 jobs at risk unless businesses receive immediate financial support from the Government, according to new research.

UKHospitality’s Supplier Alliance research highlights the impact of the COVID crisis on the hospitality supply chain and the lack of financial support that has been received by businesses.

Key findings from the survey:
• 1 in 5 jobs in the supplier workforce have already been lost (workforce now just 82% of February 2020 level)
• 1 in 3 businesses have received no Government grants or loans
• Without support, 2 in 5 businesses will have to close, with 1 in 5 facing insolvency – 324,000 redundancies likely
• Hospitality venues will need to return to 59% of normal trading levels to make supplier services viable.

UKHospitality has called on the Government to use the forthcoming Budget to ensure that supplier businesses receive the necessary financial support.

This includes:
• A meaningful, national grant fund for the hospitality supply chain to allow viable businesses to invest in goods/services critical to a successful restart
• A Government backed invoice factoring scheme to free-up funds for investment and mitigate some of the risk of trading through the restart.

UKHospitality Chief Executive Kate Nicholls said, “It cannot have escaped many people over the past year that hospitality businesses have been completely devastated by the COVID crisis.

'Much less visible, but by no means less terrible, has been the destruction heaped upon those businesses that supply restaurants, pubs, hotels and the entirety of hospitality.'

Nicholls continued, “The pain of the past year has filtered right down the supply chain and many of those businesses are now staring ruin in the face. One in five jobs have already been lost in the supply chain and another 324,000 are now at risk of being lost unless there is immediate financial support.

'One-third of businesses have not received any support whatsoever from the Government and the sector is clinging on.

“The totality of hospitality is dependent on its supply chain. If supplier businesses fail, then the entire sector grinds to a halt and we are at risk of the whole thing collapsing.

'We are hopeful that hospitality businesses can lead the recovery of the UK’s economy this year. That cannot happen if businesses are not supplied to do the job. The supply chain is everything and it must be supported.'

Nicholls finished, “The Government has to understand this and provide the support that these businesses desperately need at the Budget. Otherwise, our sector will rapidly become a house built upon sand and the terrible damage that has been felt over the past twelve months will only be compounded.”