Consumer spend on hospitality remains eroded, report finds - prompting calls for more support for Scotland

The Scottish hospitality industry is calling for more support to prop up businesses, saying a major new report shining a spotlight on the impact of the pandemic shows that its concerns are “genuine”.

The new study published by the Office for National Statistics (ONS) shows that overall consumer spending on pubs and restaurants remained at less than 70 per cent of pre-pandemic levels at the end of last month – although it had recovered significantly from its low during the first lockdown.

The report, spanning January 2020 to last month, also stated that total turnover in the sector in May was £6.9 billion in May after restrictions were partially eased, compared to just over £1.2bn 12 months previously, but a quarter lower than 2019 levels.

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The ONS says that despite some recovery, spending on food, drink and accommodation 'has quite a way to go'. Picture: Peter Summers/Getty Images.

Some sub sectors have bucked the overall trend with a strong performance, with the turnover for restaurant and mobile food services, for example, in May reaching £3.3bn – five-and-a-half times what it was one year previously. Additionally, campsites were boosted by the booming staycation market.

The ONS compiled the report using figures from its own Business Insights and Conditions Survey, as well as card transaction data from Revolut, and transactions information from Vocalink.

Findings also include the amount of hospitality staff on furlough amounting to just under 590,000 in at the end of May, down from just under 1.65 million in April 2020. Hospitality is among sectors being hampered by large numbers of staff having to self-isolate.

ONS senior economist Hugh Stickland said: “Today’s figures show that while spending on food, drink and accommodation have recovered somewhat from the rock bottom seen during the first lockdown, it still has quite a way to go.

“Confidence about the future remains low across hospitality, possibly further hit by the delay to full reopening, showing the pressure the sector is under.”

Also commenting was Stephen Montgomery, group spokesperson for the Scottish Hospitality Group, who said the trade body has been warning the Scottish Government about Covid's “devastating” impact on the sector for more than a year.

Fears

"The findings in this report provide plenty of evidence that our concerns are genuine,” he said.

“Hospitality venues cannot be expect to viably trade when consumer spend is so low and turnover is down 25 per cent.

"We aren't out of this pandemic by a long way – and our sector still needs a lot of help. It is essential for the Scottish Government to work with the industry to protect jobs with sensible, fair measures to allow business to trade, and it's vital to have support for those that can't.

"Hospitality is ready and willing to play a part in Scotland's recovery, but we can only do so if decision-makers recognise the ongoing issues that are seriously affecting our businesses."

His comments come after the Night Time Industries Association Scotland said firms operating in this field were “now out of time” – and in urgent need of the Scottish Government allowing them to trade without restriction or providing much more financial support.

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