The true position of the current trading is just about beginning to settle down, with the month of July under our belt. That is with the exception of our friends and clients in Wales who were only allowed to open their doors on Monday 3rd August. Did that really stay that much more vulnerable for a whole extra month? Was it immoral to go across the Severn bridge and have an illicit pint after visiting the Cribbs Causeway shopping mall? all very confusing but life goes on!
It has been a month of refection with hopes being raised but the truth of the vulnerability of the coming autumn/winter sinking in. A common and genuine fear is that of the financial cushion that was generated in previous years following a half good summer has now gone. Trade gardens could be fully exploited, beer festivals, local outside social events to name but some. None of these Spring and Summer events happened all due to social distancing. All of which would have contributed to a build-up of “winter funds”. To quote several of our clients all without exception saying the same thing…. ”By this stage, I would be looking at reserves of nearly 90% of what I need to see me through the winter. Now it is at maximum 20%. I still owe back rent as it has been deferred not canceled and I do fear for the level of trade I am allowed to pursue in the winter. For the first time, I am truly frightened that I will not make it through to next Spring”.
We hate being pessimistic, but the skies are darkening with chickens coming home to roost. The biggest problem is that of rent. It will still need to be paid despite the time of enforced non-trading from March to July. Deferment is all very well but there are two rent quarters before next Spring. Unless the Pubcos do bite the bullet and wake up to what could be a mountain of insolvencies, the debts will not disappear. For sure all the Government initiatives have helped massively to stave off the inevitable, not least in the VAT reductions, the £10 August Monday - Wednesday food promotions, rates relief, and of course the furlough initiative. But all this help and assistance will come to an end and then what next? No point in living off savings, maxing out the plastic, extending the overdraft (if available), when what beckons is no light at the end of the financial tunnel.
It would seem that the lessons of July will be the careful taking stock of reality in say October/November. We so much hope that the then looking forward and financial planning will be positive. Hoping somehow things will magically get better is not an option. Better to solidly plan ahead than be caught in a perfect negative storm early next year.
Here’s hoping that our round-up for August will produce better vibes!