Go to the pub now, or a bar or a restaurant, and you’d hardly think that the pandemic had happened. The sun has - finally - reappeared, beer gardens are packed, and people are spilling out of the city’s pubs and clubs. Same as it ever was.
But appearances can be deceptive. Two years on this month from the very first lockdown, when the country was thrown into that bizarre, at times unnerving stasis, while things might look like they’ve returned to normal, beneath the surface the hospitality industry is facing an existential crisis. And it will get worse before it gets better. Potentially much worse.
“It’s definitely not normal,” says Justin Crawford, co-owner of Electrik in Chorlton, the Hillary Step in Whalley Range and Volta in Didsbury. He’s also one of the directors of Escape To Freight Island and Refuge, so he’s got a bird’s eye view of the situation, from neighbourhood bars to upscale city centre spots where the footfall is in the thousands.
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Justin, like every other operator in Manchester, is seeing a staffing crisis unfolding in front of his eyes, like a train wreck in slow motion. And it all stretches back to lockdown.
“A lot of people who were working in hospitality and were furloughed started to seriously rethink why they were in the industry,” he says. “Some decided it wasn’t for them. But a bigger factor than people realise, is that a lot of people are in hospitality by default.
“Maybe they carried on doing it after their degree, or they did it to supplement their training, or as a second job. So furlough gave people the opportunity to think ‘I was training as a teacher, or I was doing law and fell off that’ and so then looked to go back to it and retrain. And some people in hospitality decided to start their own thing too.
“So a lot of people exited the industry all at the same time, and now there’s a vacuum. Not only have we lost staff because of that, we find it hard to recruit staff because of it. So as people have left, there’s now a shortage of people.
"We can’t replace the people we lose, and the talent pool is now smaller. It’s an escalating effect, and this all feeds into wage inflation. Then there’s burnout, because fewer people are having to work longer hours.”
He says that people also tend to leave the business due to a lack of visible career progression, and that it’s hard to shake off its image of being a transient sector. The current talent vacuum means that those still working in hospitality can now pick and choose the jobs they want.
Justin puts it into context. Another high-profile operator in the city recently told him that they had been seeking a general manager for a new site. They had a full day of interviewees lined up for the role, 10 in all. Not a single candidate turned up.
All of this is bad enough, without rising costs of, well, everything - food, drinks, deliveries because of the petrol price increases. Name an overhead, and it’ll be more expensive than it was pre-pandemic.
Amid the initial fallout of the first lockdown, Chancellor Rishi Sunak was seen as the nation’s saviour in government. While Prime Minister Boris Johnson was accidentally attending parties on Downing Street, Sunak was orchestrating the furlough system and providing grants for the self-employed.
Sunak also dropped business rates and VAT, and while none of it was perfect, the swiftly knotted-together financial safety net saved countless hospitality businesses from going instantly bankrupt. Meanwhile, the haphazard Eat Out To Help Out scheme encouraged people to venture out, but was also later accused of causing a spike in infections.
But now, for many, it feels like he’s about to let hospitality fall at the final fence. Emergency hospitality grants which were announced just before Christmas were at best described as being ‘better than nothing’, and hopefully the first in a wave of assistance measures (they weren’t). At worst, they were pilloried by many in the industry, which believed it was being locked down by stealth.
Following Sunak’s Spring Statement days ago, it’s been confirmed that VAT will indeed return to its 20% pre-pandemic rate in April, something UKHospitality chief exec Kate Nicholls called ‘a real setback for thousands of UK hospitality businesses still suffering the devastating effects of Covid’. A rise in National Insurance contributions will go ahead as planned too, another gut punch for business owners.
Sacha Lord, Manchester’s night time economy tsar, really thought that Sunak would come through in the end, simply because the lifeline hospitality needs right now - keeping VAT discounted and delaying the NI rise - didn’t require him to put his hand in his pocket. He just needed to pump the brakes on the plans instead.
“It wasn’t like we were saying ‘we want a load more cash’,” he says. “We were just saying ‘work with us’. Ultimately, we know the cost of living is surging, we know inflation is rocketing, and we know supplies are costing us a lot more. Operators were treading water before the Spring Statement, but this could be the final straw for some people.
“It’s just short sighted. He’s going to lose out ultimately on years of corporation tax, PAYE, NI, VAT, because these businesses will close. My friends are saying to me ‘aren’t you glad things are back to normal?’ Well, they’re really not back to normal. It looks like they are - bars, restaurants, theatres are all busy, which is amazing, but it will take a minimum of three to five years to get back to pre-pandemic levels.
"The debt people have taken on is phenomenal. And not to mention the customers, who have also been battered in the pocket. As you get less and less money in your pocket, you look to where you can cut spending it.
“I feel so sorry for people who have worked all their lives in this industry, and seen it snatched away at the last minute. It's heartbreaking.”
He thinks that as far as the talent drain goes, the industry might have to ask itself some tough questions. “I understand why people had to leave the industry when there were no jobs and they were short, and had to pay rent and put food on the table,” he says. “I absolutely get that. But people aren’t rushing back to the sector. Maybe we need to look at ourselves and ask ‘did we treat staff the way we should have done in the first place?'
“Don’t get me wrong, there are a lot of operators who definitely did. But we need to do things like introduce minimum hours, a real living wage, encourage people back to the sector. We can do a better job at putting a spotlight on hospitality, and say ‘this can be a career’. I didn’t go to university, I didn’t get any A Levels. But you can get on well in this industry.”
A week before the first lockdown was announced in March 2020, chef Mary-Ellen McTague, formerly of the celebrated restaurant Aumbry in Prestwich, not to mention Heston Blumenthal’s three Michelin star Fat Duck, had already closed her doors.
Her sister, who is a doctor in Sheffield, was part of the city’s emergency planning team and warned her about the seriousness of what was coming. She didn’t have any intention of putting her staff or customers in danger, so the decision was made for her.
Finding herself with a glut of fresh food about to go bad, Mary-Ellen started turning it into meals for people who needed them. She then did the same with produce from kitchens all over the city, and got the catering community, now suddenly with a lot of time on its hands, to help out too. Her non-profit organisation Eat Well MCR was born. It’s still going now, stronger than ever, and at the last count has provided 60,000 meals to people in food poverty across Manchester with support from the likes of Hawksmoor, Dishoom, Gary Usher’s Elite Bistros and the Cloudwater brewery.
“I wasn’t really thinking ‘what’s going to happen to my business’,” she says. “It was the least of my worries.” While launching Eat Well kept her and many of her staff occupied, her own business was actually hurtling towards a far less certain future. Though she re-opened, it was much later than most, in the September of 2020.
“It was alright,” she says. She thinks again. “Actually, it wasn’t alright… it was horrendous. It was the most stressful thing I’ve ever had to do. I was convinced either a member of staff or a customer was going to get covid and die. I was very uncomfortable and very reluctant. I knew if we didn’t, then the business would definitely not recover. We opened, but it felt very high stakes, everything was new, and all these new systems had to be put in place to prevent infections.”
The second lockdown happened, during which she, like many others, embraced takeaway, which was ‘something to do’ and something to top up furlough. It didn’t make money, but it was about ‘existing’, she says. Furlough and grants didn’t cover her outgoings anyway. It was loss-making, but slightly less so than doing nothing, and kept staff occupied and the business in touch with its customers.
Once things had reopened again in the spring of 2021, she tried to build up the business again to what it was, with The Creameries running tasting menus, but it simply wasn’t viable as a business model. She told her staff she was probably either going to close down or sell up.
Instead, she decided to offer her head chef Mike Thomas the chance to take it on and run it as a neighbourhood restaurant, serving Italian country-style food, renaming it Campagna at The Creameries. It’s saved the business for now.
“We’ve had to adapt,” she says. “We were more of a destination restaurant before, and all that seemed to have fallen off a cliff. We needed to be more of a neighbourhood place.
In October last year, it looked like it was an impossible task to turn it around. And it still might be. We’re still suffering the financial hangover. Luckily, we still have a loyal team, and the people in it know how important they are to us.”
There is one ray of light amid the gloom, however, and he’s called Mayur Patel, and with his friend Marko Husak, he founded Bundobust, first in Leeds, and then in Manchester and Liverpool. They’re currently working on their newest site, due to open in York.
“I’m very positive about things at the moment,” he says, his glass very much more than half full. “The business is definitely back to 2019 levels, that’s for sure.”
Office traffic - ‘office-core’ as he calls it - is still a bit of an issue, with hybrid working very much the norm, meaning that during the weekday lunchtimes things aren’t quite as buoyant as they used to be. But they’ve managed to weather the staffing crisis many are experiencing, keeping hold of nearly all their employees through the entire lockdown.
“Other than people who had a career change,” he says. “You put a serious working population in their house for two years, they’re going to get ideas! There’s only so much rearranging the cupboards you can do, right?”
Attracting staff is hard, though, he agrees with that, and agrees with the idea that the talent pool is now much, much smaller. “But the people who have stayed all wanted to stay, so what’s left is quality,” he says.
“But, of course, we’re now all competing for that same workforce. Hospitality has always had a bad time in terms of its perception of being ‘a career’. It’s still years behind where it needs to be in the UK. So there’s a bit of work for us to do, attracting young talent.”
He also speaks to a lot of fellow operators in London, who he sees as struggling more than we are in the north. “They’re on a different recovery rate to the north,” he says. “London is really hurting from the working at home model. We’re recovering a bit better up here. But there certainly needs to be a bigger push of getting people back into the cities." Sacha Lord quotes new stats from UKHospitality that Manchester is as much as six months ahead of London in its recovery.
Justin Crawford also sees some bright side too. "I think hospitality is more appreciated now than it was," he says. "And people are more happy to spend a little bit more to get a better level of service, a better offer.
"It feels like people are starting to value it a little bit more as part of their leisure time. While I've painted part of a negative picture, that's while you're in it. Long term, I'm actually not as pessimistic."
“We’ve been chucked a lot of curveballs,” Mayur goes on. “But we will come out alright. The whole industry has taken a battering, and we still know there’s a lot of uncertainty. But we’ve navigated through so much sh*t already.
"The sun’s out, and the pandemic is behind us. What is ahead of us, I’m not going to project. But we wouldn’t be taking on another site if I didn’t have some level of confidence. I’m just putting on my noise cancelling headphones, and cracking on.”
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