A trade agreement may have given UK businesses some certainty for 2021, but Brexit challenges around staffing and sourcing still lie in wait.
That was the warning in a special December vodcast to discuss the latest Business Confidence Survey from CGA in partnership with Fourth.
The Survey revealed how hospitality leaders’ confidence plummeted over 2020, with fewer than one in five (18%) leaders now optimistic about prospects for 2021. It also found that four in five (80%) leaders fear Brexit will negatively affect the cost of their goods, while two thirds anticipate impacts on profitability (65%) and the supply chain (64%).
Any Brexit-related disruption to sourcing food will exacerbate the huge impacts of the pandemic on the supply chain. A separate CGA survey with Prestige Purchasing found that 92% of businesses had difficulties reinstating their supply chains after the first COVID-19 lockdown, and more challenges are likely to emerge when the current lockdown comes to an end.
Talking at CGA’s vodcast in December, industry expert and TriSpan operating partner Robin Rowland said the biggest supply challenges could be around fresh fruit and vegetables. While the worst fears of disruption were eased by the announcement of a trade deal just before Christmas, close links with suppliers will be needed to minimise disruption, Rowland said. He added that many operators had stripped back menus to simplify the post-Brexit supply of goods:
To be economically viable and deliver a decent product… menus have been simplified across the board. That’s not a bad thing, as there was a lot of waste in the system before.”
Max Tucker, analytics director at Fourth, agreed that rationalising menus was a sensible move.
Having a reduced menu and more simplified approach has helped operators to get as much profit margin as they can out of the current trading conditions… That’s all very well on paper, but if the sites can’t open the margin could be very different from expectations.”
He said Brexit’s impact on the arrival of workers in the UK could create more upheaval. “People are not expecting employees to disappear overnight, but over time there will be pressure on the pool of talent.”
Karl Chessell, CGA’s business unit director for hospitality operators and food EMEA, reminded people that Brexit’s disruption of staffing was a major industry concern before the pandemic struck—and the issue hasn’t gone away. 90% of business leaders stated that immigration levels and controls would be a significant issue for the sector in 2020, due to the impact on staffing:
The last year has been all about saving jobs and businesses but over time, once the demand returns, we may start to see shortages of workers come back to the fore.”
To watch a full replay of CGA’s Business Confidence Survey and Brexit vodcast, click here.
