Deliveroo and major restaurant CEOs warn of grave damage to industry unless Government takes action

Deliveroo CEO and founder Will Shu, alongside 90 restaurant partners, including some of the UK’s leading restaurant brands, have today written to the Prime Minister to call for action to support the restaurant sector in the face of continuing challenges posed by COVID-19. 

The signatories, which collectively represent more than 1,000 restaurants across the UK, include Itsu Founder and CEO Julian Metcalfe, Pano Christou, CEO of Pret A Manger, Emma Woods CEO of wagamama, and Neil Manhas, General Manager of Pizza Hut. They state that the crisis for the UK restaurant industry is far from over, with thousands of restaurants facing bankruptcy due to ongoing challenges posed by COVID-19. Indeed, a survey by Deliveroo of small and independent restaurants, conducted soon after lockdown restrictions were introduced, revealed that 52% believed they would be forced to permanently close within the next three months if the current situation continued. 

The required social distancing measures, combined with a challenging economic environment and changed consumer behaviour, will make it incredibly difficult for restaurants to reopen, let alone break even. The letter warns that unless urgent action is taken by Government, ‘shuttered restaurants in towns and cities across the country will be a permanent reminder of the damage this pandemic has done.’ 

In a detailed submission to the Government, Deliveroo, based on extensive consultation with partners large and small, from leading national chains to small high street independents, has formulated a series of key policy proposals which would help the industry through this challenging period, adapt to the new economic environment and thrive in the future. These include:

  • Continuing support on staffing costs: The Government should consider maintaining the Job Retention Scheme for the restaurant sector for as long as social distancing measures are in place, and to commit to subsidising wages of restaurant staff through the Scheme if they return full time. These actions will give restaurants certainty and allow essential kitchen staff to work full time, despite lower sales levels.
  • Reducing tax burden: Re-opening at a reduced capacity will require restaurants to stimulate demand to maximise revenues. To support this, Deliveroo calls on the Government to cut VAT on restaurant food for as long as social distancing measures are in place. Such a tax cut is the most popular policy measure amongst Deliveroo’s independent restaurant partners, with 75% saying that it would have a benefit to their business.
  • Taking action on rent: Nearly three quarters of Deliveroo’s restaurant partners are concerned about being able to meet rent payments in the near future. To address this problem, Deliveroo proposes a number of solutions, including “mortgage holidays” for landlords to give financial breathing space to restaurants in the form of lower rents, and an extension of the moratorium on evictions for as long as social distancing measures prevent restaurants from operating at full capacity. 

Other areas for proposed action include helping restaurants meet the cost of becoming COVID-secure, a government-led campaign making clear that restaurant food is safe and changes to planning law to enable restaurants to adapt operations more easily

The signatories recognise the significant steps that the Government has already taken to support the sector and the wider economy during the pandemic. However, given the unique nature of the restaurant sector, important safety measures such as social distancing, wider economic challenges, and the importance of restaurants to local communities, they argue that this set of policy solutions are essential to ensure that the restaurant sector is able to recover and thrive.  

Commenting, Deliveroo CEO and founder Will Shu, said: ‘We are proud to be part of the UK’s restaurant sector, which contributes so much to the UK economy and local communities and is one of the most diverse and vibrant in the world. That is why we are urging the Government to implement this package of measures to ensure that the UK’s amazing restaurant industry survives and then thrives.”

Kate Nicholls, chief executive of UKHospitality, said: “Restaurants have been hit hard by the COVID-19 crisis. Household name brands on every high street have been closed and many will be operating at well below capacity once lockdown ends. These businesses provide employment and are great social hubs in every region. As these proposals from Deliveroo and their partner restaurants show, restaurants need urgent support from the Government so that they can help rebuild economies and give people some much-needed enjoyment. Without it, some will close permanently and people’s jobs will be lost.”

Imran Sayeed, German Doner Kebab CEO, said:  “As the UK restaurant sector is battling ongoing challenges from the COVID-19 crisis, it is critical that businesses in this industry receive the right support to survive through this period.

“German Doner Kebab is backing Deliveroo’s six step initiative in support of the UK’s hospitality industry. The recommended steps in this initiative are a necessity for businesses to cope with the huge pressures the restaurant industry is experiencing from the impacts of COVID-19. 

“Adopting these measures in full will help protect jobs and the economy. The UK hospitality sector employs millions of people across the country and without help some restaurants may never be able to open their doors again.

“Although the Government has provided significant support through lockdown, more still needs to be done to protect the future of the hospitality sector which is not only an integral part of the country’s cultural identity but will also play a key role in the UK’s economic recovery.”