First lockdown cost UK hospitality and high street £45b

The UK's first Covid-19 lockdown last year cost UK hospitality and high street businesses £45b in turnover, researchers estimate.

A new study from the universities of Cambridge and Newcastle used data from the Office for National Statistics (ONS) to compare retail, hospitality and online sales in the UK between March and August 2020 with average figures for the same months for the years 2010-2019.

The shortfall for bars, pubs and restaurants was "dramatic", said researchers, with the first UK lockdown causing sales to fall as much as 90% below the business-as-usual level, equating to around a £25b revenue loss.

Hospitality sales saw some recovery post-lockdown as government schemes such as Eat Out to Help Out kicked in but were still 25% below usual revenues by the end of summer.

Sales in ‘food and beverage serving services' suffered most in terms of lost revenue. In February, turnover was £5.7b, just shy of the £6b ‘business as usual' estimate. By March this had slumped to £4.3b against a prediction of £6.7b.

April sales for bars, pubs and restaurants were just £700m compared to usual levels of around £6.7b: an approximate shortfall of 90%. While this gap shrank it remained startling. Even with the Eat Out to Help Out scheme, August sales were £5.2b compared to what would normally have been around £7b.

"Understanding the monetary impact of the pandemic is important to gauge the magnitude of the damage, and can help government design policies to assist these sectors," said Dr Luca Panzone from Newcastle University, who co- authored the study with Dr Shaun Larcom and Dr Po-Wen She and from the University of Cambridge.

"Food services and non-food retailers lost a huge share of their yearly business, compared to food stores and online retailers that actually gained from lockdown. One-size-fits-all policy approaches across retail won't work," Panzone said.

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