FPA MEMBERS BELIEVE BUSINESSES WILL SURVIVE BUT WITH REDUCED SALES AND STAFF

FPA MEMBERS BELIEVE BUSINESSES WILL SURVIVE BUT WITH REDUCED SALES AND STAFF

The second FPA Business benchmarking survey continues to reveal the status of members’ businesses in these unprecedented times.   This survey received 70 responses, compared to 41 for the first, indicating how concerned members are about their circumstances.

Overall members are now believing that they can survive but the likely hospitality reopening will be so limited that projected sales volumes will be substantially reduced along with a corresponding reduction in staff numbers.

Member comments reveal a demand for help with redundancy payments if furloughing is to end or be substantially scaled down, a reluctance to take on debt, continuing late payments and several pleas for the proposed bans on single use plastics – which are currently in high demand – to be delayed.

RESULTS IN DETAIL

The survey shows a slight increase in the numbers that are selling less, compared to the huge decline revealed two weeks ago.  Some distributors had experienced an initial surge in cleaning and hygiene items which may now have scaled back somewhat.

The intentions regarding furloughed workers show a small increase on last time, 74% of respondents saying that they are furloughing some workers, compared to 70% last time.  Fewer members believe that they will be able to maintain current staffing levels and from the figures we believe that we will see an overall reduction in employment, with 1:20 leaving the sector.

However, there are signs of hope, with 81% of respondents believing their business will survive, up almost 20% on the previous survey.  But the impact in some quarters will be more brutal, with 1:5 believing that they will survive but only with increased borrowings; it may be that the principal of borrowing more to stay in business when customer demand is unlikely to return for a long time is causing concern.

There is an increase in reporting of problems with unpaid invoices with 80% saying this is an issue, with comments that both large and smaller business are finding reasons not to pay. The numbers of cancelled orders are still significant but are slightly down on the last survey (70% this time versus 88% last time) which is not surprising as we plough further into the lockdown.

Executive Director Martin Kersh comments: “It is a sign of the robustness of our sector that 81% of respondents believe they will survive and rumours of some, albeit limited, reopening gives cause for hope but clearly we are months away from business as usual.  Keeping businesses going in the interim is huge challenge especially with such large volumes of invoices still unpaid.  There has been talk of the furlough scheme and other support measures being extended to the hospitality sector after other businesses return.  We will lobby for the hospitality supply chain to be equally included since the fortunes of both are so inextricably linked.”

 

Ends                                                                                                                                      8 MAY 2020

Issued on behalf of the Foodservice Packaging Association by Leapfrog PR. Editorial contact is felicity@leapfrogpr.com or call 01242 282000.