- Wednesday, August 17, 2022
By: Manju Chandran
THE EXTENSION OF FURLOUGH SCHEME PROVIDES A SAFETY NET FOR COMPANIES WHICH CAN RETAIN AND PAY STAFF UNTIL SPRING
BEAN + BREW, LONDON
‘CONTINUED SUPPORT IS CRUCIAL TO HOSPITALITY’
IN MANY ways, coffee and winter go hand-inhand: its throat-warming alchemy the perfect balm for the bone-chilling weather. But winter isn’t just about giving coffee shops an excuse to add comforting pick-me-ups such as gingerbread lattes to the mix: they typically do a stronger trade in the colder months.
However, an ongoing level of consumer uncertainty combined with a drop in footfall, due to the rise in remote working, has left many coffee shop owners fretful about the months ahead.
“Winter’s usually a good season, but with people not commuting and further lockdowns affecting customer confidence, I don’t know whether they’d leave their houses for a comforting drink,” says Michaela Kyriacou, founder and director of London-based coffee bar Bean + Brew.
However, the news that the coronavirus Job Retention Scheme (furloughing) has been extended until March 31, 2021 has been a salve to Kyriacou. “It’s meant I’ve managed to retain all of my four staff,” she says. “Yes, furloughing still costs the business, but these costs are relative to the wages staff members receive while furloughed. It’s much more affordable.”
A new clause introduced to the scheme means anyone made redundant on or after September 23 may be able to be rehired and returned to furlough. Having made the difficult decision to make one member of staff redundant in October, Kyriacou says the revised scheme allows Bean + Brew to keep this employee on payroll. “Retracting her redundancy has meant I’ve kept all four of my team this year,” she says.
When the first lockdown hit in March, Bean + Brew had just celebrated its first birthday. Kyriacou had worked hard to set up the cafe, having left her corporate tax job at a big four accountancy firm to train as a barista. Closing the store for three months was “gutting”, she says, but during this time the store sold online, with Kyriacou and her father delivering coffee around London. Kyriacou also furloughed her staff for this period, giving her confidence the scheme will benefit Bean + Brew once again.
“We’ve had part-time furloughing before, so we know how it works,” she says. “Not only is it familiar, but it’s effective, too – furloughing definitely did its job. As a business-owner, it gave me peace of mind that my team were covered.”
She also believes the furloughing extension can provide succour to other hospitality firms: “The industry still isn’t out of the woods yet, but continued support is crucial to keeping them going.”
Kyriacou also hopes that one silver lining from the pandemic will continue. “[The crisis] has brought home that local businesses are the staple of the community: people are going out of their way to visit local shops, and we’re getting to know our customers more personally. Ultimately, we’re in the business of hospitality, not just selling coffee.”
CREATIVE GARDENS, NORTHERN IRELAND
‘THE FURLOUGH SCHEME IS VITAL UNDER LOCKDOWN’
DURING November, the UK’s 2,000 or so garden centres will be overrun with Christmassy tinsel, garlands and elves. The festive flourishes mark the end of a mixed year for garden centres.
Having had to close temporarily during the spring, they subsequently bounced back, reporting a sales boost of 60 per cent over the summer, according to the Horticultural Trade Association.
“Lockdown life has generated more interest in the home and garden,” says Philip Gass, finance director at family-owned Creative Gardens, which operates three sites across Northern Ireland. Yet, despite this surge, Gass says the firm’s cafes aren’t performing as well.
In mid-October, Northern Ireland announced a fourweek partial lockdown, shutting the hospitality sector apart from takeaways and deliveries. As a result, Creative Gardens’ cafes closed for the second time this year, but the company will now be able to benefit from the extension of the UK government’s furlough scheme. “Poorer weather and darker evenings see fewer people shop at garden centres, especially if cafes and hospitality are closed,” he says. “The [furlough extension] scheme is vital while we’re under such restrictions.”
The flexibility of the furloughing extension is another plus, says Gass, as it enables Creative Gardens to redeploy furloughed staff to the firm whenever there’s a hike in consumer demand. “We’re able to bring in who we need and when, without impacting their eligibility for support,” he says. “This means we’re able to keep open people’s jobs until such time we need them back fully; this is particularly the case over winter and Christmas.”
During spring’s lockdown, Creative Gardens placed nearly all of its 190 employees on furlough.
Gass credits the scheme with allowing the business to retain nearly all of those staff. He is also confident the winter economy measures will help boost the growth of the business, founded by his mother in the 1980s.
“We’ve got plans to expand and are determined not to let Covid-19 get in the way,” he says. “[The measures] mean we can hold on to jobs and pick up where we left off once restrictions are removed. It’s given us and our cafe staff peace of mind. Had it not been introduced, I’m not sure what we would have done.”
GEAREDAPP, EDINBURGH
‘THE JOB RETENTION SCHEME IS THERE IN CASE WE NEED IT’
IF CORONAVIRUS has shown anything, it’s that unpredictable events can flare up at any time. Even though many small businesses have seen trade return to pre-pandemic levels, just knowing that the furloughing extension is available until March 31, 2021 – with a government review planned at the end of January – gives these firms reassurance if circumstances change during the winter.
Edinburgh-based Geared App is one of the 1.2 million employers that used the furlough scheme earlier this year. Fortunately, business is thriving again for the software company, which develops apps and platforms for clients such as the NHS and Awdis and nonprofits such as the Homeless World Cup Foundation. As such, GearedApp won’t be using any UK government support to furlough any of its 14 staff members at the moment, but may consider it if clients tighten their purse strings.
“It’s good to know that the option’s there if we should need it,” says co-founder and director Lara Findlay. “If we go into another lockdown with harsher restrictions it could mean business slows down. We have clients working in hospitality; if they slow down operations, it could have an impact on us.”
Back in March, this is exactly what happened. “Everything seemed to dry up,” says Findlay, who helped start the firm at Napier University in 2013 (GearedApp’s first job was building an app for the Edinburgh Capitals ice hockey team).
“Most business stopped altogether, which meant we had a massive dip in our cashflow,” she says. “One of our biggest clients is an event-based platform and they stopped work in the middle of a project. We didn’t know how things would end up.”
Furloughing two employees under the coronavirus job retention scheme helped assuage these fears. “Being able to furlough these two staff members [they returned in September] was a big help for us, because it meant we could build some reserve,” says Findlay. “It also helped us assess how much resource we’d need for the next few months and get back on our feet again.”
The new scheme offers flexible furloughing, which allows employees to work part-time with the government funding 80 per cent of the worker’s salary for the hours not worked, up to a maximum of £2,500 a month.
“Bringing somebody back part-time is better than all-or-nothing, especially when tasks build up,” says Findlay.
For the next few months, Findlay says GearedApp (which she describes as a “tech-for-good” firm) will be busy building solutions to help businesses get back on their feet from a digital perspective. She believes these clients may benefit from the winter economy measures.
“Businesses have been in such flux over the past year – I’m just glad that protection is there for them,” she says. “We’ll see what happens with further lockdown restrictions, but it’s good to know these schemes are available. It’s a possibility for us should we need it.”
CORGI, WALES
‘THE BUSINESSES THAT COME OUT THE OTHER SIDE WILL BE STRONGER’
WITH their luxury socks adorning the feet of the Queen, Prince Charles, and A-listers such as Daniel Radcliffe, Corgi has certainly made a mark in Wales and beyond.
However, as various UK lockdowns eat into the retailer’s busiest season, co-managing director Chris Jones admits that he’s expecting things to get tough.
“We’re very seasonal and we’re normally quiet in spring,” he says of the Ammanford-based business.
“But a lot of shops [we supply to] are saying that they are going to carry over the stock they bought last spring but couldn’t sell because they were closed. We are expecting orders to be well down.”
Jones employs a skilled workforce of about 60 and, as uncertainty lies ahead, he’s relying on the furlough scheme to keep them in their jobs – and the 128-year-old business afloat.
“It makes a big difference,” he says. “We are facing a few hard months, so getting this furlough money means we don’t have to let anyone go. Otherwise we’d lose skills and we can’t afford to lose anybody.”
In fact, rather than submitting to doom and gloom, he’s feeling confident and ambitious for the future.
“There’s a couple of untapped areas of the market that we are going to go for. I feel really positive,” he says.
“People always need socks and when they start going out more I think that they will be thinking about their wardrobe and getting new ones. The businesses that come out the other side will be stronger.”
* Produced in partnership with the UK Government
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