We asked several licensees and operators for their thoughts and business projections for the first quarter of 2021 and here’s what David Wither, Chairman of Edinburgh’s Montpeliers group…
We are in a poor situation in Edinburgh by being in tier three and we took the decision a few weeks ago to close all our venues apart from Montpeliers of Bruntsfield – it’s simply not viable closing at 6 pm and not serving alcohol. To be honest, in the last couple of days I’ve become quite pessimistic because I felt that we would be moving into level two this week and that is not going to happen. I can see the restrictions being in place until next spring. Level two could probably get close to breaking even but at Level three we are losing £30 000 a week – that’s rent, supporting the team, pension top-ups, national insurance top-ups, holidays accrued, etc. To be honest, as a business we came from very strong foundations and we will be able to navigate our way through this despite going from healthy cash flows to loans.
It will take a good two years to get back to pre-Covid levels and to increase cash flows and wipe our deferred costs and for these reasons, I can’t see all operators being able to continue.
There are some massive deferred costs to address in the future like VAT, landlords, and unpaid costs that are so sizeable for so many businesses. This is going to be catastrophic – as will mental health which is a major risk going forward and I am not convinced that the Scottish government has found a balance between mental health and economy. The majority of people spent 15 to 20 years working very hard to build up these businesses only to lose them in a few months.
It’s incredibly frustrating that the government is not listening to us – it’s so unjust. As part of the Scottish Hospitality Group, we have suggested that minor adjustments like serving alcohol until 8 at night would allow our businesses to be viable. If only they would listen and strike a more reasonable balance between health and economy.