Changes to furlough scheme could lead to difficult staffing decisions for delis
As the government plans to reduce its contributions to furloughed employees’ wages, retailers – especially those with cafés in urban areas – are being faced with difficult decisions about the future of their staff.
FFD has spoken to a number of independents (several under the assurance of remaining anonymous) and some have had to make redundancies already in the foodservice part of their businesses, while others are holding out and trying to work out how to retain those who have been furloughed.
In June, the Chancellor Rishi Sunak announced that the Government’s Coronavirus Job Retention Scheme (CJRS) would end after October.
From August onwards the Government will be gradually reducing the its level of contribution from 80% of furloughed employees wages, up to £2,500.
In September it will pay 70% of wages up to a cap of £2,187.50 and then in October this will be 60% of £1,875.
The owner of one urban deli, which has traded with reduced hours throughout lockdown, told FFD that they had already had to let five members of staff go from the café side of the business, and there could possibly be more redundancies coming.
“It’s not because of them, but I just know that the business is not going to be back into full swing,” they said.
“We’ve had no grant and have to find savings from somewhere.
“I know trading is going to get harder before it gets easier.”
One of the big issues is the foodservice area that is due to open at the deli has had to shrink to half of the usual number of covers for social distancing reasons.
The lack of footfall for urban retailers has also caused problems.
They added: “Even now, you walk through the city and the only places there are queues – depressingly – are at Greggs and the trainer shops.”
Furloughed workers can now be brought back part-time under the CJRS, with the government covering a proportion of the wages when they are not working.
Wally’s Deli in Cardiff has only recently reopened and owner Steve Salamon said that he would be using the furlough scheme for as long as possible.
“This is going to be the more dangerous time,” he said. “Lockdown was stressful, but relatively easy. Now, bringing staff off furlough and wondering what levels of business will be like is a bit of a worry.”
Another retailer with multiple sites told FFD that, although they hadn’t had to make any members of staff redundant, it had used the opportunity to let go of “under-performing” staff.