The food and beverage (F&B) industry is a dynamic and exciting one, but it’s no secret that cafes and restaurants were challenged by numerous lockdowns, restrictions, limited staff and delivery adjustments. Although the UK economy is bouncing back from the pandemic, things will never completely go back to the way they were, so what’s the current position of the sector today? Are F&B businesses back to sunshine and rainbows, or do more challenges lay ahead? Continue reading to discover the most recent run-down of what’s going on in the F&B industry right now.

Here’s a quick recap of how the pandemic has impacted the sector. 

👉 According to a report conducted by CGA consultants and AlixPartners, nearly 10,000 licenced businesses, including pubs, clubs, and restaurants, closed permanently last year as the coronavirus outbreak wreaked havoc on the hospitality industry.

👉 According to UKHospitality’s quarterly Tracker produced by CGA, lockdowns cost the hospitality industry £30 billion in revenue.

👉 According to data from Fourth, there were 660,000 job losses in the hospitality sector in 2020.

On top of this, a survey conducted by Young Minds UK shows that 67% of 2500 respondents believed the pandemic would have a long-term harmful impact on their mental health. This includes young individuals who have lost loved ones or have experienced painful events due to the pandemic.

Thanks to the vaccine rollout, experts say that the worst of the pandemic is behind us, but new issues are arising in the industry and F&B businesses have new problems to tackle.

Staffing problems – This is a big problem that is delaying the industry’s recovery. After months of lockdowns and restrictions, consumers are eager to spend, but a lack of staff is holding many F&B businesses back from maximising this opportunity. These shortages are largely due to the fact that the industry is struggling to attract new talent. A lack of education and entry-level training opportunities makes it difficult for young people to get started within the industry, and the stigma surrounding hospitality positions and career growth is worsening the issue. This in turn is causing existing staff to become burned out by their increased workload, and many are leaving for alternate career paths. 

 ❌ VAT rates – The pre-pandemic VAT rate of 20% is set to return on the 1st April 2022, but is this sustainable for Food & Beverage businesses? At present, hospitality businesses are trading under a reduced VAT rate of 12.5%. Since the sector has been struck so hard by the pandemic, businesses have pressed the government to keep the 12.5% rate while also providing other tax advantages to the industry. It’s vital that F&B businesses plan their cash flow ahead of time and ensure that the necessary VAT is paid. Otherwise, employment and businesses are at risk.

Supply Shortages – A shortage of supply chain workers and HGV drivers have caused food shortages to become the norm across the United Kingdom. Cafes and restaurants are receiving fewer deliveries of products, which means that when they sell out of a particular item, inventory is now taking longer to refill. This means that businesses will need to adapt as the season progresses. Research by UK Hospitality found that 94% of hospitality businesses are currently experiencing supply difficulties, with 2/3 of companies cutting their product portfolios. Another 2/3 have had their deliveries delayed, and 56% have seen significant price increases.

Nevertheless, it’s not all doom and gloom! Let’s flip the switch and appreciate the positives and the lasting lessons that have changed the world. 

🤝 People and businesses have been closely connected more than ever! Businesses within the industry found creative, genuine ways to show empathy to connect with their customers emotionally. There has been a wave of support and appreciation for small and local businesses during the pandemic, and it looks set to continue. 

🤝 The importance of preparation. Thousands of businesses have capsized during the pandemic for one main reason: lack of cash flow. Whilst it’s nigh-on impossible to predict a global phenomenon, the pandemic has underscored the importance of cash certainty for F&B business owners. A strong enough cash position can even protect your business in the most serious of circumstances; it truly is life or death.

🤝 Don’t give up. Even on the darkest of nights, the stars are always shining. The pandemic has proved very difficult for F&B businesses and yet most have responded admirably to these unprecedented challenges, finding smart ways of working that have enabled them to remain open and keep satisfying their customers.


Despite the challenges presented by the pandemic, the F&B industry has every reason to remain positive. Preparation is the key to survival this winter, which means being proactive about cash flow and using scenario planning to outline solutions for issues that may arise. The pandemic has proven that the F&B industry is both beloved and resilient, and so despite the ripple effects, the post-COVID future looks bright.