Some 55% of respondents, all of whom are either founders or board level executives, predict it will take between 13 and 24 months to get back to the profits they were making before the Coronavirus crisis, with one operator suggesting that could only happen if they are “able to open to capacity”.
According to one respondent: “With social distancing it will be impossible for us to make a profit. We will make a loss and potentially have to go into liquidation.”
Others point to a combination of employee and customer issues, with one saying: “In the absence of continuing furlough, it will take much longer and become unlikely to break even, let alone return to pre-crisis profits, or will necessitate substantial redundancies in the face of subdued customer demand.”
Fifteen percent of respondents believe a return will take longer, belieiving it will take between two and three years. But slightly more operators, 18%, think they might be back at a pre-virus profitable level within 12 months of reopening, although two say that this would be conditional on social distancing guidelines and footfall levels.
Two respondents believe it would take over three years, with one saying they are “forecasting (guessing) that trade levels may recover by Christmas or within a year, but assuming we have to take on debt to survive, we will not be profitable, or have the same cash left over, until well after three years from now”.
The pub sector is slightly more optimistic, with 25% believing they will be back to pre-virus profits inside 12 months. However, the majority of respondents (41%) believe it will take between 12 and 24 months to achieve the same level
Fourteen percent of pubs believe it will take between two and year years to get back to pre-cv profit levels, with one large multi-site operator saying the “key turning point will be when there is a mass vaccine available and customers finally get their confidence back. Lack of disposable income will also be a factor.”
Another warns that a “U-shaped depression more severe than the 2008-12 recession suggests two to three years is probably optimistic”.
Indeed, 6% believe it will take more than three years, with one significant multi-site operator saying they “would not expect profit, from our current estate, excluding investment, to deliver profit the same as 2019 for four years. We will hit the same profit level within three years, but this will be due to investment.”
And a similar number, 8%, say they ‘don’t know’ when it might happen. “With no support or cash flow the bigger issue is trying to open," say an operator of a small chain. "I no longer see my company surviving.”
Another operator of a larger chain says they expect it to vary by site. "We have to recognise that some sites may never fully recover.”
The weekly Hospitality Leaders Poll spoke to 500 founders or board level operators across restaurants, pubs and food to go.