Official Statistics Reveal Just How Badly Lockdown Hit Restaurants

The U.K. economy has entered the deepest recession since records began in 1955, a new report from the Office for National Statistics (ONS) revealed today. For the months of April through to June, when the country was locked down to control the spread of the novel coronavirus, the economy shrank 20.4 percent, compared with the first three months of the year. Of all sectors, the ONS report finds that the hospitality was the hardest hit.

Chancellor Rishi Sunak who has in recent weeks cut an optimistic figure — serving plates of katsu curry at Wagamama, picking up a lunch from Pret, and hailing the success of the government’s Eat Out to Help Out campaign — reacquainted himself with the dire economic reality faced by the country. “I’ve said before that hard times were ahead and today’s figures confirm that hard times are here,” Sunak said earlier today. He has since said the slump is “unprecedented.”

ONS deputy national statistician for economic statistics Jonathan Athow said that after the sharp fall in the second quarter, “the economy began to bounce back in June with shops reopening, factories beginning to ramp up production and housebuilding continuing to recover. Despite this, GDP in June still remains a sixth below its level in February, before the virus struck.”

Athow also said that the sector comprising restaurants, pubs, and cafes in the U.K. suffered most from lockdown. “Overall, productivity saw its largest fall in the second quarter since the three-day week. Hospitality was worst hit, with productivity in that industry falling by three quarters in recent months.”

Food and drinks businesses, a large section of which were completely closed during lockdown, registered a decline of 83.4 percent in the three months to June. “All components of food and beverage services fell in April, though there was less impact on takeaways,” the report says. “Since April, pubs and bars have remained at a very low level, however restaurants and takeaways have demonstrated growth, though remain well below their February 2020 levels.”

After the government eased lockdown restrictions, the economy saw a modest recovery — gross domestic product (GDP) rose by 8.7 percent. Resultantly, and because of a small pick-up in bookings taken for the later part of the year, the report claims, hospitality businesses showed growth in June. It also states that unlike restaurants and takeaways which continued to recover in that month, pubs and bars continued to suffer.

With 22,000 hospitality workers having lost their jobs already this year, no national solution on the rent question for restaurant tenants, and with furlough employee support due to end in October, the economic forecast compounds the already significant challenges faced by employees and employers across the restaurant industry. For now, there is a comparatively buoyant mood across restaurants — after months of closure, good weather and a government-designed incentive has urged customers back — but those “hard times” Sunak identifies appear not just to be “here” but to have only just started.