Hey all, Ed here just with a little bit of an update from us at The Tuppenny.
One of the few positives we have had from these crazy times is getting to know you lot better as our deliveries have taken us to your homes, and we have had a little more time to be constructive and interactive on social media. You are a very important part of what we do, in fact, the most important part – we don’t see ourselves as a business that sells drinks, we are a business that provides you with a social space to be in, to meet friends, make friends and generally do a lot of the things that make us human and build a caring, fun, supportive and constructive society. The booze just funds that! We believe it is important that you guys feel as much of this place as we do, therefore we wanted to keep you updated so you know where we are at during this crazy time, what we are doing and why. Apologies for the length of this post, but I felt it would be good for you to also know what is going on in our wider industry as a whole and how this affects us.
The hospitality industry in the UK is facing its biggest challenge ever. It is the 3rd largest employer in the country and contributes over £70 billion to the UK economy, and yet for the period of lockdown it has almost ceased to exist. The response by different businesses has been diverse to say the least. Some seem to have almost disappeared, with no effort to find alternative income streams. The shutters went down in March for them and have stayed that way since. Whilst others, like here at The Tuppenny, have been dynamic in response, setting up online retail and delivery options and more. For us, this was as much about staying in people’s minds as it was generating and income (ultimately, we are only making around 25% of what we would normally expect to do), but it is doing enough to keep us afloat for the time being, and is keeping us in touch with our customers. This is also why we quickly found ways online to keep the music quiz going, even adding a general knowledge quiz to the calendar and working on live music streams with the Swindon Shuffle team. We wanted to keep you all entertained even if we were all sat at home as we see ourselves very much part of a community, and therefore with responsibility to the wellbeing of those also in it.
For those businesses who have vanished from our lives for the time being, one must assume that they are wholly reliant on the measures put in place by the government that they claimed would protect hospitality business and jobs and they hope that these handouts will be enough to enable them to reappear when lockdown and social distancing ends. In some situations that is exactly what the measures will enable, whilst in others it is unlikely we will see these business again in a way we recognise. We obtained a grant based on our businesses rateable value, which will go a long way to keeping cash flowing for us and hopefully avoid us needing to get into debt to keep the business afloat, but any site with a rateable value of £51k wasn’t eligible, neither were businesses that were housed as part of another business so didn’t have their own account with the council. It is surprising how many pubs and bars have such high rate valuations (one of the few advantages to being smaller and having no outside trading space I guess, much as we moan about this in the summer!). These businesses are therefore reliant on the government loan schemes (which must be repaid) and any business interruption insurance pay-outs they qualify for.
Here is where some problems occur. A new survey by trade body UKHospitality has highlighted some serious gaps in the level of support being provided. About half (48%) of businesses have applied for loans, but the majority of those receiving a response (57%) have had their bids turned down. Government-imposed state aid rules account for more than a quarter (26%) of rejections, alongside banks telling businesses they have enough capital (28%). Almost three-quarters (74%) of businesses have claimed, or intend to claim, for business interruption insurance. However, fewer than 1% that have claimed have received pay-outs. Only about a quarter of eligible businesses had received the hospitality grants, a scheme that UKHospitality was urging be extended to more companies. In terms of workforce, redundancies have been kept to a minimum (2%) so far, with most businesses furloughing staff, accounting for 84% of sector employees, as we have done, although this process has been slow and complex so far.
In essence, this report shows that despite government assurances that businesses will be kept viable, in reality things are still pretty dire, and more work needs to be done to make sure as many businesses as possible can survive this crisis. The Hospitality industry was the first to be hit by restrictions in trade, has been the hardest hit and likely will suffer for the longest. We and our peers are in this for the long haul. Whilst everyone is rightly looking to how the economy and the industry restarts in a way that avoids further health issues authorities also need to ensure the support measures already announced are getting through to businesses.
Looking forwards, if the hospitality sector is told it can reopen, but with continued social distancing measures in place, (this has has been raised as something that could be lasting till the end of the year) we could come into potentially a much more dangerous scenario where the government decides because we have been told we can reopen it can end the furlough scheme and the other help it has provided. This would be disastrous, and push some businesses that have battled through under, resulting in permanent job losses. Looking at our trading space for example, rearranging the furniture to see what two metres between tables looks like is pretty eye-opening and shows that should we reopen under these circumstances we would have a capacity probably of around only a half a dozen or so tables. Add this to the other measures necessary to keep everyone safe and it would be almost pointless from an income perspective. As a sector the more we entertain social distancing measures the more we give government a sense we are prepared to live with them. We are better being closed for longer if it means we can safely reopen, in as near to an uncompromised form as possible.
So, for the time being we continue to operate our “Deliverbrew” service via our online shop and wait to see what else happens. We cannot thank you all enough for sticking with us through this. Your continued custom is the difference between us being viable or not as a business (we desperately hope to avoid getting into debt during this period) and being able to reopen pretty much as you remember us, with those lovely familiar faces behind the bar. We are acutely aware that supermarkets etc sell beer and wine far cheaper than we do, but on the whole are selling inferior products and brands, so we cannot express how appreciative we are of you all thumbing a nose to the big boys and buying local and keeping us and the independent suppliers we buy from going (the brewers etc are suffering as much as anyone). It is businesses like us and our suppliers that are rooted in the local community that have been working to look after and will help to rebuild society.
Yes we are using some of this down time to do those niggly jobs that annoyed us for ages before closedown, and there will be further changes and improvements before you can come back in I am sure (the place currently looks more like a small warehouse than a bar). We are also investigating other ways of bring in money and spreading the Tuppenny word so if anyone fancies some Tuppenny merch like t-shirts, tote bags, bottle openers, badges and stickers let us know as we are thinking of doing some, and equally if you have any ideas that you have thought would work for us, please do get in touch, this business is as much about you as it is us. We are determined to stick this out to welcome you back at some point, in whatever version of us you find eventually!
Ed, The Tuppenny