London’s Covent Garden. The capital went into tier-2 coronavirus measures last Saturday © Charlie Bibby/FT

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Leading bar and restaurant owners in London’s Covent Garden have applauded chancellor Rishi Sunak’s latest support package for companies and jobs, saying he has thrown them a lifeline during a hard winter under coronavirus restrictions.

But other restaurateurs warned the government’s fresh effort to prop up the hospitality industry amid a second wave of Covid-19 infections may not be enough to save jobs.

Although the capital is not under the toughest coronavirus restrictions now in place in parts of the north of England, London’s entry into so-called tier 2 measures last Saturday made an already difficult situation for hospitality businesses — involving a 10pm curfew — much worse.

Hospitality companies are allowed to stay open but households are banned from mixing indoors under tier 2 in England. Customers who would normally frequent Covent Street’s bars, cafés and restaurants with friends can now only socialise indoors with their families or support bubbles, prompting a plunge in businesses’ takings.

Several bar and restaurant owners in Covent Garden welcomed Mr Sunak’s more generous job support scheme announced on Thursday, and new grants for hospitality companies in tier-2 areas.

Shop owners in Covent Garden have expressed concern as a result of the drop in trading © Charlie Bibby/FT
Customers who would normally frequent restaurants with friends can now only socialise indoors with family or support bubbles © Charlie Bibby/FT

Jeremy King, who runs the Delaunay restaurant, a popular hang-out with City financiers, said Mr Sunak had given a “lifeline” to hospitality businesses. He added his wider group of restaurants had 9,000 bookings for October before tier 2 was introduced, but by last weekend this number had halved. 

Mr King’s restaurants now run at a loss, but he still reopened the Delaunay this week following its closure during the national lockdown in March.

“It’s a question of how much we lose,” said Mr King. “We were faced with the choice of reopening or closing indeterminably. We couldn’t contemplate having to make so many staff redundant — so decided to take the positive route. It is gratifying how supportive our customers have been.”

Matt Lovell, founder of seafood restaurant Oystermen, said Mr Sunak’s latest package “means that we can probably continue with [jobs support] in some form”.

He added the move to tier-2 restrictions was a “cliff edge”, with the number of table bookings dropping from 160 on a typical week day before the pandemic to about 20 or 30. But trading had picked up in the last day, said Mr Lovell on Thursday. “People are always going to want to eat . . . and we are good at what we do,” he added.

Matt Lovell, left, founder of seafood restaurant Oystermen: ‘People are always going to want to eat’ © Charlie Bibby/FT
Most restaurants in Covent Garden are open but many are running at a loss despite government support © Charlie Bibby/FT

Charlie Gilkes, founder of the Inception group, which owns Mr Fogg’s Tavern in Covent Garden, said Mr Sunak’s new measures should be enough to keep his workforce intact. “It will protect a large amount of jobs,” he added. 

But some other restaurateurs were far less optimistic.

Ranjit Mathrani, who owns Masala Zone in Covent Garden, said trading had dropped 60 per cent in the days after the government announced London would enter tier 2. At these levels of trading, it may be “impossible” to keep the restaurant open, he added, even with the extra support from the Treasury.

“At the very least we will have to lay some good people off,” said Mr Mathrani. “The support announced this week whilst welcome will do no more than reduce this number temporarily.”

Many restaurant and bar staff have had to be laid off because of the downturn in the number of customers © Charlie Bibby/FT
Property owners have agreed flexible leasing for tenants, enabling shops to remain open despite difficult trading © Charlie Bibby/FT

Lance Perkins, director of restaurants and bars at Ennismore, which owns the Tandoor Chop House on the edge of Covent Garden, said tier 2 amounted to “death by stealth”.

His Covent Garden restaurant has already cut staff from 32 to nine and Mr Perkins said Mr Sunak’s revamped job support scheme will fall short.

Meanwhile, with the chancellor’s new grants for companies under tier 2 being focused on the hospitality and leisure sectors, there was disquiet in Covent Garden among shop owners whose trading has also dropped.

Property companies have also been affected. Listed West End landlord Shaftesbury raised £297m from investors on Thursday, saying there had been a “material deterioration” in trading conditions because of Covid-19.

Capco, which owns much of the property in the centre of Covent Garden, has agreed flexible leasing for its tenants, including rents linked to turnover. Almost all shops and bars on its estate are open as a result.

“We made an effort to get on the front foot with our tenants [by saying] ‘What’s happened to your business, what do you need to get through to the end of the year?’,” said Michelle McGrath, Capco executive director. 

Capco is doing what it can to woo people back into Covent Garden, in part by “winterising” the piazza and surrounding streets with covers and outdoor heaters for exterior dining.

The outside tables at Tuttons, a restaurant on a corner of the piazza, were full on Thursday night, with a small queue of people waiting to be served. 

Daniel Coffer, Tuttons’ development director, said al fresco dining had helped keep trading “more than acceptable” through the summer, even if turnover was now about 40 per cent of last year following the 10pm curfew and tier-2 curbs.

But he has kept his staff and was hopeful that more customers will return because of the enduring appeal of the area. “Customers want to sit outside,” said Mr Coffer. “As the winter goes on, as we find ways to keep customers safe, we are in a unique position in Covent Garden.”

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