Warning businesses will have to adapt to survive after government support ends

A restaurant owner has warned businesses face a massively different future to the one they had been expecting prior to the outbreak of the coronavirus pandemic.

The owner of The Dowry in Lerwick’s Commercial Street has spoken after changes were announced to the UK government’s £15 billion furlough scheme, which has helped businesses cover staff wages during the crisis.

Stuart Fox was speaking after Chancellor Rishi Sunak began the balancing act of slowly withdrawing the expensive furlough support, with the aim of avoiding a major crash in the economy as he does so.

The scheme is due to finish at the end of October, with employers paying National Insurance and pension contributions from August, and steadily taking back greater responsibility for staffing costs in the run-up to October.

In Scotland, pubs and restaurants are not expected to reopen their indoor spaces until phase three of the Scottish government’s so-called routemap out of lockdown.

Larger shops that are currently closed, hairdressers and other outlets are also expected to remain closed until that point. But exactly when that will be depends on how successfully the virus can be kept at bay.

Mr Fox said he backed a phased return to normal, and pointed to plans for the Dowry to open as a take-away within the next few weeks.

But he warned of potential problems facing businesses in the longer term.

He emphasised concerns he had over the longer-term future of businesses.

“My worry is not for the immediate two to three months. My worry is for the next six to nine months,” he said.

“I think that’s when businesses could really struggle. If we don’t get any trade through this summer and then are thrown into a bleak dark summer with even less trade, and we’re restricted to what we can do within the establishment – it doesn’t take a rocket scientist to see where that’s going to go.”

He warned many businesses would look very different in future months – and not all of them will survive.

“In some ways, that they have to be either on furlough or off furlough is maybe stopping a lot of folk from going back,” he said.

“I would be in favour of government phasing out sooner rather than later.”

He added: “We’re looking at re-opening as a take-away – I would hope by the end of the month.”

Mr Fox said his business had been preparing a takeaway menu, and was building up its online presence to enable customers to buy from its website.

“That’s what we’re looking at, but we’re not in any great rush. If we do it we have to do it right.

“We’ve thought a lot of different scenarios and we have a clear idea of how things could go but we’re not committing to anything. We’re trying to provide for every potential scenario.

“We’re maybe better placed than some places because of the size of our establishment. There are other places that, if there are not relaxations, they could have real difficulty trying to trade.”

On the phasing out of furlough, he added: “I think where we’re at just now with 80 per cent of support up until the end of July is fair.

“If we’re suddenly asked to pay wage with no trade that month, where’s that money coming from? Yes we can do takeaway, but we have no idea how successful that’s going to be.

“Right now, while we’re inactive, we’re planning how we can do lots of different scenarios. The real stress will come when we are open. It will be a moving feast. The business in six months time could have a completely different shape or look to it.”