Hospitality supply chain businesses on verge of collapse without immediate support

Trade body 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.

“It cannot have escaped many people over the past year that hospitality businesses have been completely devastated by the Covid crisis,” says Kate Nicholls, chief executive of UKHospitality.

“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.”

According to the data, one in five supplier jobs have already been lost, with the workforce reduced to 82% of what it was in February 2020.

A third of businesses have received no Government grants or loans, with one in five facing insolvency without further financial support.

In total two fifths of businesses expect to close, putting 324,000 jobs at risk.

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 and services critical to a successful restart of the sector; and a Government-backed invoice factoring scheme to free-up funds for investment and mitigate some of the risk of trading through the restart.

“The totality of hospitality is dependent on its supply chain,” continues Nicholls.

“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.