A fast-growing East Anglian pub group is budgeting for its revenues to be halved due to strict new rules imposed because of the coronavirus crisis – despite a promising post-lockdown start.
Like all hospitality businesses, Chestnut Group, which owns 11 pubs across Suffolk, Norfolk and Cambridgeshire, is bracing itself for a hefty financial hit as new rules mean it must scale back customer numbers to allow space between groups.
But it remains upbeat, and company founder Philip Turner said Trip Advisor reviews following its first wave of pub reopenings suggested customers felt it had achieved the right balance between safety and a warm and welcoming ambience with some “great” feedback.
MORE – Regional pub group prepares to reopen as 95% of guests say they’re ready to returnThe group began a phased reopening of its sites on Saturday, July 4 – but even allowing for attempts to spread customer visits more evenly across the day, it won’t be able to match its pre-covid performance until rules to prevent virus spread are relaxed.
It has already lost about six to eight per cent of its 330=strong furloughed workforce since lockdown began through natural attrition, with about 12 people moving on to other jobs, and a further nine or 10 redundancies.
And its 32-strong management team has agreed to temporary pay cuts of around 10% to 20%. Mr Turner said he had also taken a larger salary sacrifice to help keep the business on track amid the unprecedented fallout from the crisis.
The bulk of the workforce is returning through the government’s flexible furlough scheme and the group has been determined to create a welcoming atmosphere amid the constraints imposed.
“It’s been a torrid time. We have made some really difficult decisions,” he admitted. “This year is a write-off in terms of every business is going to look at their financial year backwards.”
While there weren’t crowds, the pubs were busy. Many customers would have stayed away because they were afraid of an initial rush, he said.
“It was still a really good day,” he said. “To be absolutely honest, in terms of revenues I went to the Weeping Willow (in Barrow, near Newmarket) at lunch and the Globe at Wells on Saturday evening (July 4) and the whole of the coast was quiet. It was extraordinary. It was a grey, miserable day. The scenes we saw in Soho and Borough Market are pretty unique. I didn’t see that anywhere I visited.”
He added: “From a pure cash perspective we have got money coming in.”
It was predominantly a “training weekend” as staff returned and got used to the new rules, he added. He was pleased with how they had responded – and guest feedback, he said. “Every single property is unique. The reason we have done a staggered opening is to make absolutely sure we can make it work.”
The lockdown period has allowed time for the Westleton Crown and the Ship at Dunwich on the Suffolk coast to be refurbished prior to reopening.
Pub menus have been simplified, and the company is refining processes, said Mr Turner. The group anticipated that seaside and tourist-led properties would see more returning customers, but it had been the country pubs which had been the real draw in the first days – perhaps because customers wanted to show loyalty to their local.
“Despite what has been going on we are committed to the sector,” said Mr Turner.
“The economy need to get going. We need to restore things back to normal as quickly as possible, but do it in a safe way.”
The group remained committed to East Anglia and to growth, he said.
But the crisis has taken a toll, he admitted, and they had to make some difficult decisions “so we as a business can survive”.
“It has been horrendous. We have spent six or seven years building a business and you don’t want to make people redundant.”
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