Almost two-thirds of businesses in the accommodation and food services sectors had stopped trading, either temporarily or permanently, at the end of June, according to data from the Central Statistics Office (CSO).
While the vast majority of business across the State were trading in some capacity in absolute terms (92 per cent), the accommodation and food services sectors has been particularly badly hit, followed by construction in which almost 20 per cent of businesses had stopped trading by June 28th.
The food service sector has already seen high-profile casualties, with household names like Bewley’s ceasing trading on Grafton Street. The cafe last traded on March 16th and its 110 staff were informed at the beginning of this month that they were being made redundant.
And the outlook for the sector isn’t looking much better even as lockdown restrictions ease. The Boxty House in Temple Bar said on Monday it would close its doors indefinitely due to the lack of business in an area of Dublin city that is still largely shuttered.
Stimulus plan
While most businesses were trading in some form, the majority (61.6 per cent) had lower than normal turnover in June, according to the CSO data.
Representative bodies in the sector have sought out cuts to the VAT rate in the July stimulus plan, a Government package expected to commit to spending of about €7 billion.
Some positives could be found in the survey results which noted that just 0.5 per cent of businesses indicated that they have ceased trading permanently.
The fall in business activity came as companies were forced to spend money on meeting requirements to comply with coronavirus restrictions.
The median spend of medium-sized companies was €10,000 while small businesses had to spend about €4,000, according to the CSO. The median spend for large businesses was €42,500.
Almost a third of businesses have implemented temperature screening in the workplace, while more than 46 per cent have mandatory personal protective equipment.
Remote working
Among the respondents to the survey, the results of which are not weighted to account for different size, almost 27 per cent of staff were working remotely while more than 58 per cent were working at their normal place of work.
However, in larger businesses – defined as those with more than 250 staff – 40.8 per cent of the workforce were working remotely.
Almost a third of companies reported lower-than-projected personnel costs up to June 28th with 29 per cent having lower than projected non-personnel costs.
The crisis has forced a number of businesses to take measures to ensure a steady cashflow. Over a quarter have deferred or changed Revenue payments, almost 23 per cent have deferred or changed property payments and 16 per cent deferred or changed loan repayments.
On the other hand, more than half of businesses responding said they had not had to take any measures to manage cashflow. Some 75 per cent of businesses reported no change in their ability to access finance.
The online survey was sent to a sample of 3,000 businesses and the information was collected between June 30th and July 15th. The response rate to the survey was 27.1 per cent.
