Grocers sales to benefit from hospitality curfews and working from home reversal

Following the government’s introduction of a 10pm curfew for all hospitality venues and a reversal on its push to get people back into city-centre offices, Shore Capital head of research Clive Black said grocery retailers will be the long-term beneficiaries.

In a note published today, Black said grocery sales “could rest at 25%-40% higher than pre-coronavirus levels”. He added that, with customers facing another six months of such restrictions, those figures could “prove to be conservative as behaviours adjust and become engrained”.

Black called the 10pm curfew, which is set to come into force from tomorrow, “a real hammer blow” to the food and beverage sector, particularly in hard-hit city centres. 

“Here collateral damage is going to be evident if support measures are not put into place by government with high levels of labour displacement.”

Many stakeholders for the hospitality sector, which has already suffered a bruising six months since lockdown forced all pubs, bars and restaurants to close in March, have also been warning of heavy job losses and called for government intervention. 

UKHospitality Chief Executive Kate Nicholls said: “These restrictions are a further, potentially fatal, blow for many hospitality businesses. In isolation, they may appear moderate, but the cumulative effect is going to be hugely damaging. Consumer confidence is going to take another hit and we cannot hope to recover while confidence remains low.

“The shift back towards working from home is going to hit city-centre hospitality very hard. These businesses have already lagged behind as office workers and tourists have stayed away and they are going to take another battering.”

Heart of London Business Alliance chief executive Ros Morgan also warned yesterday of the potentially catastrophic effects of the new restrictions. 

In response, chancellor Rishi Sunak has been briefing certain news organisations about his “creative” responses, with many of the measures he announced at the beginning of the pandemic set to come to an end in October. 

Sunak is reportedly “looking at whether the Treasury and companies could share the cost of topping up the wages of staff who can only be employed part-time because of the coronavirus pandemic,” according to the Financial Times.