Business News Round Up (24/06/2022)
Trade bodies estimate staff shortages cost hospitality £21 billion
Staff shortages in the hospitality industry are reaching “critical” levels, causing nearly half (45%) of operators to cut trading hours or capacity in order to cope and costing the industry £21 billion in lost revenue. The stark reality of the staffing issue hits home in a joint survey by UKHospitality, the British Institute of Innkeeping, and the British Beer and Pub Association which demonstrates how a shortage of workers is damaging hospitality businesses and the UK’s recovery from the pandemic. According to the trade bodies, the crisis is causing an estimated £5bn loss in tax for the Exchequer. In Scotland, it is estimated that there are about 40,000 vacancies across the hospitality sector, according to UKHospitality. Earlier this week, a survey by the Scottish Tourism Alliance also shone a spotlight on the many challenges facing hospitality operators. Reflecting the views of more than 700 tourism enterprises, captured between May 17 and June 8, the survey signalled that the cost-of-living crisis, more people booking overseas holidays and a lack of competitiveness on the world stage were hitting the industry’s prospects hard. It found that 50% of businesses have fewer bookings than normal for the June to August period when compared with the outlook when quizzed at the same time in 2019, while 40% reported a fall in spending since May.
Employee ownership deals double across Scotland
More Scottish firms than ever are making the move to becoming owned by their staff, an experienced adviser says. Lawyers at Lindsays have been involved in almost twice as many employee ownership deals across the country so far this year than they were in the whole of 2021. Speaking as part of Employee Ownership Day today (FRI), Douglas Roberts, a Partner in the firm’s corporate team, says there are no signs of that trend slowing with the Scottish Government pushing for 500 Employee-Owned Businesses (EOBs) to be based in the country by 2030. And he believes the rise will add another layer of resilience to the nation’s economy as businesses face up to challenges including rising costs. Lindsays, which has offices in Edinburgh, Glasgow, and Dundee, advised on five deals which saw companies become employed during 2021 – following on from 15 others in the previous four years. The firm has completed nine Employee Ownership Trust (EOT) deals already this year, many of them breaking ground in new sectors. Mr Roberts said: “We are seeing huge demand from companies interested in, then becoming, employee-owned. As well as the transitions we have completed so far this year, a number of other deals are in the pipeline. It’s really encouraging for the Scottish economy.”
UK economy ‘running on empty’ as recession signals mount – PMI
Britain’s economy is showing signs of stalling as high inflation hits new orders and businesses report levels of concern that normally herald a recession, a closely watched industry survey showed on Thursday. S&P Global’s Purchasing Managers’ Index (PMI), covering services and manufacturing firms, also showed companies raising pay and passing higher costs on to clients, a worry for the Bank of England. The PMI’s preliminary composite index held at 53.1 in June, above the median forecast of 52.6 in a Reuters poll of economists and unchanged from May. But its measure of new orders fell to 50.8, the lowest in over a year. Factory orders dipped below the 50.0 growth threshold to 49.6. “The economy is starting to look like it is running on empty,” Chris Williamson, chief business economist at S&P Global Market Intelligence, said. “Business confidence has now slumped to a level which has in the past typically signalled an imminent recession,” he said, adding that the economy was likely to show a fall in output in the second quarter that could deepen in the third quarter.
Retail leaders welcome Glasgow shopper stimulus scheme
The Scottish Retail Consortium (SRC) has praised Glasgow City Council’s plans for a £9m shopper stimulus scheme. It is aimed at benefitting 85,000 households this summer by providing them with a £105 voucher or gift card. David Lonsdale, director of the Scottish Retail Consortium (SRC), said: “This is a bold and imaginative plan to help less well-off households and give a much needed shot in the arm to the city’s consumer-facing economy. “Shops will only survive with the patronage of the public and questions remain over what demand will look like for the remainder of the year given the cost of living crunch – this scheme should boost retail in the city and may even trigger additional spending by shoppers beyond the value of the voucher transaction, creating an even larger economic multiplier.” Retail in Scotland has been hit hard by the pandemic, with slow retail sales growth, elevated store vacancy figures and shopper footfall still well below pre-pandemic levels. Glasgow’s shopper footfall in May was 12% lower than the comparable period prior to Covid, for instance. The SRC stated that a retail voucher or high street stimulus scheme should be considered for elsewhere in Scotland, as a means of re-igniting consumer spending and transactions.
https://www.insider.co.uk/news/retail-leaders-welcome-glasgow-shopper-27310874