The industry needs an early return

It’s going to be a good year for the leisure sector, predicts SB Machines’ Paolo Sidoli with staycation forecasts signalling a Brit invasion on home shores. But the supply chain will need to be patient – it will take time for this buoyancy to filter through. All the more reason then, he argues, that support measures are available to supply businesses.

PAOLO SIDOLI MANAGING DIRECTOR SB MACHINES

The supply chain has been unable to access many of the government’s support measures. What impact is this having on the sector?

Initially it has meant a significant reduction in capital expenditure, investment in R&D and training. The supply chain sector will be one of the last to recover and when it does, it will not be at pre-pandemic levels. To the end user, it will mean less choice and higher prices.

The sector provides the innovation that drives new product to the marketplace. This is the reason why the UK hospitality and entertainment sector is so widespread and successful. Thanks to the supply chain, we have a well developed and regulated coin-op sector that has been thriving for many years.

How have businesses in the supply chain managed to function in the absence of these measures?

From personal funds and from the layers of protection that have been built up through many years of trading.

Many SCC’s (supply chain companies) have highly skilled staff who are difficult to replace in a niche sector like ours. You cannot release key members of staff at a flick of a switch with a promise of a return to normal in the future. They might go forever and never come back.

This has certainly been the case with UK haulage firms where the more experienced drivers have simply left the sector or retired early due to the downturn in demand and changes in international customs procedures and protocols. Routes cut, less flexibility with delivery, less choice of operators and higher prices. I am afraid, it is a similar trend that could happen to our sector.

What measures are required to protect the supply chain over the coming year?

It would be pleasing to get some extra governmental discretionary funding. But I suppose the money tree has now been picked clean of its fruit. I think it would not be unreasonable to see all leisure/catering/hospitality open by March 1st with safety protocols in place but with rigid enforcement by local authorities ie facemasks, regular checks on establishments and checks on the general public. Enforcement of rules is key in a liberal and open society as the UK because as soon as the weather breaks, lockdowns or not, you will not stop people from going out. Therefore we can open up establishments whilst mitigating the health risks by rule enforcement.

In addition, give those businesses an extension on VAT relief say from 20 percent to 5 percent until the end of year. 2021 will be a good year for UK leisure, catering and hospitality as people will tend to stay local more and travel abroad less. We, as supply chain providers, can then feed off this success. This will eventually benefit us.

I would also like exhibitions to start again, at the very least in Q4 2021. It would provide a great launchpad for companies in the supply chain sector.

The supply chain has not been recognised as part of the industry when it comes to support measures. Why is there a blind spot to the supply chain, and how can this be changed?

We are forgotten about and are not considered important. Many companies go about their businesses quietly and with no fuss. I feel that Bacta should shout a bit louder on the behalf of supply chain companies because they provide much continuous and long term employment.

The government response has been to point to other business support measures available. What are your views on:

Bounce back loans: are they lifeline or another long term debt?

The Bounce Back loans helped but extend the interest free period from 12 months to 24 months.

Is the furlough scheme still viable if the industry stays shut until May?

Furloughing: it certainly helps but the longer it goes on the more that our companies become ‘zombies’. Again, I would like to see March 1st re opening BUT with rigid enforcement of rules by authorities.