Trading still tough for foodservice sector

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1913

A fresh survey on the foodservice industry has found that packaging suppliers are selling less and furloughing more staff due to the coronavirus crisis.

The third Business Impact Survey from the Foodservice Packaging Industry (FPA) found that 92% of its members are selling less than pre-Covid-19 pandemic; this is up from 77% in the FPA’s first survey six weeks ago.

In addition, 90% have furloughed staff and 5% have made redundancies. During the first survey 70% of firms furloughed staff.

Other findings include:

  • 49% said they will survive but with much-reduced business;
  • 36% believed they would survive intact;
  • 20% expect to survive with increased borrowings;
  • 80% report issues regarding payment of invoices;
  • 44% hoped that easing the lockdown would increase demand in the third quarter.

FPA executive director Martin Kersh said: ““With the prospect of the hospitality sector reopening we very much hope these figures are as bad as it is going to get.  With rumours of a reopening of hospitality sooner than expected with the possibility of social distancing being reduced to 1.5m or even 1m, pavement space being widened to enable more outside dining and consideration being given to extending opening hours there is hope for the longer term. In the shorter term any optimism must be tempered by a reduced public confidence in going out alongside a reduction in the number of office worker commuting to their workplaces with office-based businesses reviewing their working practices.

“We also have to factor in the amount of packaging already in the chain so anticipate there will be a lag in demand following the reopening of the hospitality sector and so it will take more time for foodservice packaging to return to pre-pandemic trading. It is therefore vital the support given to the hospitality sector is applied to its supply chain. Continuing the furlough scheme is felt by FPA members to be the most effective support government can offer but we should seek greater flexibility as recovery will not be smooth so an option to employ say for three days and furlough for two would give businesses the ability to meet customer demands and stay in business.”