The latest in our series of quick-fire client interviews, Jeffreys Henry LLP speaks to award-winning chef, food writer and restauranteur, Yotam Ottolenghi.
Yotam, who owns 6 restaurants in London, discusses how the new restrictions have been a hindrance to the recovery of the hospitality industry, what he believes the government should be doing to offer more support and where he sees the future of the industry.
Hosted by Jeffreys Henry LLP and interviewed by Nikhita Sagar & Bhimal Hira. Published October 2020.
HOW HAVE YOUR RESTAURANTS AND DELIS PERFORMED THIS YEAR?
Some of our locations were shut down for 2 months and the others for more than 5 months, so our takings have gone down dramatically this year.
Since we’ve reopened, our takeout and delivery delis have been doing reasonably well – not the same as they were performing before lockdown, but not significantly worse. However, anything that involves sitting-in, so restaurants and the dine-in part of our delis have taken a big blow.
HOW HAVE YOU DEALT WITH THE NEW TIER 2 RESTRICTIONS?
We’re still grappling with the new restrictions so it’s too early to say, but we’ve seen a very significant drop in sales.
We’ve been trying to figure out how we can use the latest Job Support Scheme. To be eligible, we have to keep people working at 20% of their usual hours so it’s not an easy situation to create in a restaurant.
Under the Tier 2 JSS, also known as JSS Open, employees will need to work a minimum of 20% of their usual hours while employers continue to pay them as normal for the hours worked. Alongside this, the employee will receive 66.67% of their normal pay for the hours not worked – this will be made up of contributions from the employer and from the government. The employer will pay 5% of reference salary for the hours not worked, up to a maximum of £125 per month, with the discretion to pay more than this if they wish. The government will pay the remainder of 61.67% of reference salary for the hours not worked, up to a maximum of £1,541.75 per month. This will ensure employees continue to receive at least 73% of their normal wages, where they earn £3,125 a month or less.
"Justin and his team at JH have been instrumental in supporting us through these challenging times." - Yotam Ottolenghi
YOU’VE BEEN QUITE VOCAL ABOUT ENCOURAGING THE GOVERNMENT TO MOVE LONDON INTO TIER 3 TO HAVE BETTER ACCESS TO THE SCHEMES AVAILABLE…
Tier 2 is just not a viable place for a restaurant to be. I’ve been trying to persuade the Government to raise London into Tier 3 restrictions so that restaurants can secure more financial support. In a sense, when we had no support, keeping restaurants open and empty seems to make no sense. At the moment, we’re kind of in between situations so I’m not quite sure where we’re at.
Earlier this month, Yotam joined over 200 hospitality operators and workers in a noisy demonstration in Parliament Square against ‘devastating’ Tier 2 coronavirus restrictions in central London.
Under JSS Closed, each employee who cannot work due to these restrictions will receive two thirds of their normal pay, paid by their employer and fully funded by the government, up to a maximum of £2,083.33 per month, although their employer has discretion to pay more than this if they wish.
DO YOU THINK THE EAT OUT TO HELP OUT SCHEME (“EOTHO”) WAS A GOOD IDEA, OR DO YOU THINK IT GAVE A LOT OF PEOPLE A FALSE SENSE OF SECURITY FOR THE MONTH OF AUGUST?
August was a good month for us because of the EOTHO scheme. We saw a slight drop in sales when the scheme ended but were encouraged by a gradual increase throughout September. Things were going well until the 10pm curfew and Tier 2 restrictions were announced.
I think in principle, the scheme was a step in the right direction – had we not had the more recent restrictions with things staying the way they were in August and September, I think it would’ve all in all been a positive step. Now, looking back with the recent spikes and the new restrictions that have been put into place, I’m not quite sure that it had a positive impact.
DO YOU THINK THE GOVERNMENT SHOULD BE DOING MORE TO SUPPORT THE HOSPITALITY SECTOR, OR DO YOU THINK RESTAURANT OPERATORS SHOULD BE LESS RELIANT ON GOVERNMENT SUPPORT AND CHANGE THEIR STRATEGIES TO BECOME MORE SELF-SUSTAINABLE?
I think for as long as government policy forces us to shut down to control the spread of Covid, they should offer support – the reason being that restaurants in general offer huge employment opportunities for a number of people in this country, and businesses that go under are going to be very difficult to bring back to life. So, I think it’s counter-productive to leave us to our own devices. In a few months’ time, hopefully we’ll have a vaccine and the hospitality industry will once again be the heart of the economy.
WHAT WOULD YOUR ADVICE BE TO OTHER HOSPITALITY OPERATORS TO SUSTAIN THEIR BUSINESSES IN THE COMING MONTHS?
All I can say is that everyone needs to try to make an effort to keep things going, because London has always had a very innovative and creative hospitality industry and one of the best in the world.
WHERE DO YOU SEE THE FUTURE OF THE HOSPITALITY SECTOR IN THE NEXT 2-3 YEARS?
I don’t think things will go back to normal and we will see some changes in the way people eat out, socialise and entertain. Nevertheless, I do expect people to go back to restaurants once they feel safe to do so. We saw what happened in August with the EOTHO scheme – it’s human nature.
The hospitality industry in this country is very innovative and resilient. I expect it to do well but it’s more of a question of when this will be.
I also think relationships between landlords and tenants will be different, food deliveries and ‘Click & Collect’ will be here to stay.