What does the £5bn high street fund mean for the food sector?

Nearly 700,000 businesses will be eligible for the government’s £5bn high street recovery fund. The so-called restart grants of up to £18,000 will be made available to shops and hospitality venues, such as restaurants, pubs and hotels.

While independent food retailers generally haven’t been hit by the pandemic as hard as non-essential retail, the support will come as good news to those with foodservice outlets and the producers and wholesalers that supply them. From cheesemakers to drinks brands, SME producers across the food and drink industry have been impacted by the closure of hospitality through much of the pandemic.

Mark Kacary, the managing director of The Norfolk Deli, opened a café in December 2019, which has nearly been closed for as many months as it’s been open. “In fact, we’ve only seen eight weeks of normal trade at full capacity, which was prior to the first lockdown. Since that time at best we were open with restrictions,” he told Speciality Food.

This side of the business is likely to benefit from the government’s scheme, and Mark says he is eager to reopen. The government has said non-essential retail and hospitality will begin to open from 12th April at the earliest. “There’s now light at the end of the tunnel, and this £5bn of extra cash grants will ensure our high streets can open their doors with optimism,” chancellor Rishi Sunak said.

This support will have a knock-on effect for retailers – even those who don’t directly benefit from the scheme. “I feel that anything the government can continue to do to help the high street reopen will be beneficial to food and drink retailers,” Mark said. “Even with online sales growth, I am a believer that many people are itching to get out, to go to the high street and to feel, touch and smell products and not just view images on a computer screen.

“Speaking as somebody who has a café which has been closed, government support has allowed us to pay our bills (utilities and rent), the furlough scheme has ensured that we will have staff to reopen, and the reduction in VAT rates ensured that wasting whatever we had to waste when we had to close didn’t cost us quite as much as it could have,” he continued.

So far, the government has spent a total of £25bn on direct grants to businesses during the Covid-19 pandemic.

Mike Cherry, national chair of the Federation of Small Businesses (FSB), said the money will provide a “significant cash injection” for businesses ahead of the reopening of shops and restaurants. “It will provide a much-needed lifeline, offering firms some reassurance as we look to put lockdowns behind us and focus on a vaccine-fuelled recovery.”

Wholesalers call for support

Local authorities in England will also receive an extra £425m in order to give grants to businesses that aren’t eligible for the restart grants. Scotland, Wales and Northern Ireland will get £794m of extra funding.

The FSB’s Mike Cherry said it was “disappointing” that funding for suppliers and others that have lost trade only amounted to 5% of the total, making it difficult for local authorities to reach many firms in the supply chain. “Healthy supply chains are crucial to the economy, but many, particularly those in the event and hospitality sectors, have collapsed during the crisis,” he said.

“Councils must also prioritise issuing their grants. Government figures show that only 13% of existing funds given to them by the Treasury in mid-November had reached businesses by mid-January,” he added. “They should be in a big race to stop supply chain businesses from going bust and have no excuse for any delays.”

James Bielby, chief executive of the Federation of Wholesale Distributors (FWD) told Speciality Food that any new support for hospitality must also be extended to the wholesalers that supply the sector, including restart grants and rates relief.

“After a year of ignoring the hospitality supply chain, Rishi Sunak has to recognise that the economic recovery he is trying to engineer depends on food wholesalers having the cash and confidence to re-stock ahead of the pubs, restaurants and leisure facilities they supply,” he said.

The FWD recently launched a petition calling for bespoke financial support for the industry, saying that previous calls for support had been ignored. It remains to be seen whether any sector-specific support will be granted at this week’s Spring Budget. For fine food retailers, especially those with hospitality venues, it is hoped that the level of support seen in the high street recovery fund will continue as lockdown exit plans take effect.