Watch the webinar
This morning’s session was the 80th in this series of Covid-19 webinars from the CBI – and the last before a break for August. Today we were joined by Alasdair Murdoch, CEO of Burger King in the UK and Matthew Fell, CBI Chief UK Policy Director, to discuss what we can learn from the reopening so far.
Here is what the conversation covered:
- The local lockdown in the North West of England
- Lessons learned from the reopening of workplaces
- The months ahead: what do they mean for business financial help?
- Challenges for the high street.
The local lockdown in the North West of England
Overnight, Matt Hancock announced that several towns, cities and metropolitan areas in the North West of England – among them Greater Manchester – would be placed under local lockdown measures, effective immediately. Matthew Fell took us through some of the new restrictions imposed: people cannot meet with anyone from other households, either in public places or within the home, although individual households are able to go out for leisure activities, for example to visit restaurants and pubs. There are no additional restrictions on people travelling to their workplaces, this can continue as normal.
However, Matthew said that the guidance from the government had not been all that clear and his colleagues at the CBI had been fielding a lot of calls from businesses-owners in the area seeking clarity. “We are going to need to get a bit slicker at these local lockdowns and tightening of local measures,” he said. Communications from the government should “tell people what they can do, as well as what they can’t do,” he said. To make the process of imposing local lockdowns smoother in future, it will be helpful to identify which authority will be in charge of coordinating the response, given the involvement of multiple agencies.
Another frustration for many businesses was the late timing of the announcement, explained Matthew. The news breaking late in the evening meant that businesses could not easily communicate with their teams about what the new restrictions would mean for them. If the announcement had been made within working hours, sending out those messages would have been much easier.
Lessons learned from the reopening of workplaces
Alasdair Murdoch spoke about how Burger King has responded to the different phases of the reopening process. During the first month or so of lockdown, the business was entirely closed. As restrictions began to ease, Burger King began opening its drive-through and takeaway business. “I was very keen on finding ways either to keep open, or to allow us to reopen as safely as soon as we could,” he said.
Opening these areas of the business allowed Burger King to test out procedures for operating safely. Alasdair explained that the goal of reopening was “to learn our processes, test them, amend them and change them.” For example, the business designed its menus so that kitchen staff could operate safely, putting the safety of its workers above the wants of its customers.
In Burger King’s head office, the same process of testing and trialling different procedures is now in operation. “My view is that we should all try and test the water with it,” he said. The company is trying out a hot-desking process and one way systems for the staff kitchens and toilets.
Alasdair said that getting people back into their offices in city centres is important as city centres are “dying on their feet” economically, but he did raise concerns about elements of the journey into work like public transport. Burger King’s head office is in central London and Alasdair noted his worries about his colleagues using the tube: “I do worry about everyone getting back on the Central Line,” he said.
Looking to the future, Alasdair thinks there will be a “balance” between home working and in-office work. Working together in an office is important for collaboration and decision-making as well as for people’s mental health, he said.
The months ahead: what do they mean for business financial help?
The reopening of the economy over the past few weeks has made it clear that not all sectors and not all areas of the country have been able to restart at the same pace, explained Matthew. Whereas blanket financial protection measures for jobs and businesses were most appropriate at the start of the Covid-19 crisis, as we learn more about how different businesses and areas are faring, financial support from the government should perhaps become more targeted.
There has been much discussion over the past few months about avoiding a “cliff edge” for businesses and jobs after the job retention scheme (JRS) ends in October. The CBI will have their “thinking caps on” over the next few months to work out how businesses and government can avoid that cliff edge come the autumn.
Matthew said there will be a “trade off” between making sure that support from the Treasury is targeted enough to help only those businesses that really need it, but not so complex that no one can benefit from it, or so unwieldy that it becomes difficult to access help in a timely way.
He also stressed that although there will be a hiatus on these webinars for the next few weeks, the CBI will be available to answer business questions throughout August.
Challenges for the high street
Although Alasdair’s business is benefitting from measures such as the VAT cut and the government’s ‘Eat Out to Help Out’ scheme, there are still significant financial challenges for Burger King and other high street businesses.
Rent payments and landlord disputes have been a major issue for thousands of businesses during lockdown. For a period, businesses were not drawing in any revenue and even now, footfall in town centres remains much lower than normal meaning that revenues are still depressed. Paying full rents is simply not affordable for a lot of businesses. Alasdair envisages that in future, business rents will be much more closely tied to turnover meaning that in a downturn, the financial burden is shared between businesses and their landlords.
Key questions we answered:
- Alistair, over these past few months, how have you approached getting your teams back to work?
- We tried to keep dialogue strong with our teams. I speak to the whole organisation every Monday.
- Regarding getting back to work, we are cashflow driven, and so we went from taking tens of millions of pounds per week to taking in zero. So, I was keen to find ways to allow us to reopen safely as soon as we could.
- We haven’t had many major incidents so far.
- We opened our drive-throughs first, and designed our menu based on what was safe for our people as opposed to what customers necessarily wanted.
- Opening early gave us a window to judge how to react.
- I am keen to get people off furlough. We had 16,000 on furlough so the quicker they can get to work the better.
- Alistair, lots of companies are coming back at different paces, particularly for their office teams. What’s your advice for companies thinking about going back to work?
- My view is I think we should all test the water with our return to work processes. By forcing us to do it, even if it was only a test in a few areas, we learned a lot and adapted our processes to make people feel safe.
- We’re thinking of coming back progressively from September, and we will allow people to be staggered in.
- I also think we need to come back to the city centres. If I compare our city centre sales to our outer zone sales, they are miles apart.
- Sense of balance is important in how we approach this. It won’t go back to 100% of how it was. We want to hang onto the good bits of flexibility in how they work.
- Matthew, in the context of future local lockdowns, what are essential workplaces, and who should be remaining open in these circumstances?
- What is happening in Manchester is a light-touch approach, designed to pull us back from having to go into full lockdown.
- It is going to get more complex and nuanced as we get these local spikes.
- On the communications side, while there are the things you can’t do, such as not being able to go into other households. There needs to be just as strong an iteration on what you can do as opposed to what you can’t do. There isn’t an instruction about not going to work in this example.
- Get across what you can do as well as what you can continue to do. I think that will be enormously helpful in the context of future localised restrictions.
- There is a confusion on not being able to go into other households while being able to see work colleagues as you return to work.
- Matthew, there’s no furlough scheme beyond the end of October. What does the government need to do on this?
- More targeted and nuanced support will be needed.
- Different industries and locations are coming back at different paces.
- In London something like 60% continue to work from home – compared to just 35% in the West Midlands. This reflects the different industrial mixes across the country, and it will demand a more targeted and nuanced approach.
- Support for cashflow will be essential for companies. How do we ensure the job retention scheme is gradually wound down in a way that doesn’t lead to increased unemployment?
- Alistair, what would you like the future of the government’s support schemes to look like?
- It is impractical to assume that they will go on in perpetuity.
- We need more support on trying to resolve our issue with landlords. We need to work with them to solve the tenant landlord issue which is a huge issue for us.
- Come March and June, a lot of tenants didn’t pay their rent. We were in the position that if we were shut, we didn’t pay our rent, but when we were open, we did.
- If you look at how busy the high streets are, and then think of the volume traffic in stores being down, you cannot expect tenants to be able to make their rent payments.
- This cannot be expected when people are losing their money.
- There needs to be a rapprochement between landlords and us to solve this issue.
- Alistair, it’s clear that the Prime Minister cares about healthy eating and wants to target obesity. What are your thoughts on the government’s policy on boosting the nation’s health?
- We have an active role to play in this agenda.
- Our industry is a very easy target. We already calorie label on our menus and on our website.
- We work with Public Health England already. Considerable work is being done on removing salt and fat from our foods, as well as more healthier options, smaller portions.
- Good progress has been made and we are part of the solution.
- I think there is much more of a nuance than what is portrayed.
- Education around changing our lifestyle is very important and we are keen to play our role in that.
- Matthew, what are the CBI’s priorities as we go into August?
- In the immediate term, we need to make sure that we get as good as possible at implementing local lockdowns. There are also outstanding issues around the 14-day quarantine policy that need to be fixed.
- As we turn our thoughts to the autumn, we need to make sure the measures and our work gets as practical as possible. Not just in terms of government support, but also companies’ return to work and return to office procedures.
- This has to be accompanied with a focus on ensuring that return to work enablers are in as best shape as possible, including schools, childcare support, transport etc.
- We’re thinking about more targeted and nuanced government intervention and support. The different pace of recovery we will need to get through for those sectors and businesses that have been affected differently throughout this crisis.
- We’re also turning our attention to jobs, thinking about how we collaborate on the kick-start scheme to help people back into work, as well as employment matching, redeployment of skills and people where companies are going through painful restructuring processes.
- We must maximise any job opportunities for people over these coming months.