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CLH DIGITAL
Issue 287
Managing Cash Flow In Hospitality During Economic Uncertainty Emma Birchall, Partner at advisory and accountancy firm JS (www.jacksonstephen.co.uk), explores how the hospitality industry can navigate current financial and economic pressures to strengthen resilience through better cash flow management. Few industries have felt the economic turbulence of recent years quite like hospitality. Rising supplier costs, soaring energy bills, staff shortages and unpredictable consumer spending have all impacted already tight margins. Last year’s Autumn Budget added additional pressures, with increases in minimum wages and increased employer’s national insurance contributions, leaving many businesses concerned about keeping their cash flow steady in a volatile climate. With the 2025 Budget fast approaching, we await to see whether there will be further changes that impact sectors including hospitality. An industry already subject to seasonal fluctuations, hospitality businesses face a difficult balancing act: how to maintain quality and service, while controlling costs and ensuring there’s enough working capital to cover day-to-day operations.
THE CASH FLOW CHALLENGE In hospitality, where payments often lag behind costs - such as stock orders, staff wages and utility bills - cash flow management is critical. Even profitable venues can struggle if cash isn’t flowing at the right time. Periods of uncertainty make cash flow more challenging. Delays in customer payments, cancelled bookings, or sudden changes in trading conditions can leave businesses scrambling to cover bills. Without a clear handle on cash flow, even short-term disruptions can turn into major setbacks.
FORECASTING FOR STABILITY One of the most effective defences against uncertainty is accurate forecasting. Understanding how new government policies and cost increases will affect your cash position enables better planning and decision-making. Forecasts should be dynamic and use real time information and should include scenario planning to plan for the impact of seasonality, changes in occupancy and event cancellations. Creating a detailed cash flow forecast helps hospitality businesses understand the financial impact of quieter
periods, identify upcoming pain points, and gives them information to be able to act more proactively. Having an understanding of the break-even point gives businesses a better indication of when to adjust pricing, staffing, or operating hours to help ensure sustainability without sacrificing service quality.
STAYING ON TOP OF DEBT When customers or clients delay payments, the impact can ripple across an entire business operation, meaning that robust debt management is vital. Regular communication with suppliers or customers that owe payments more closely is helpful. Simple, proactive steps, like issuing friendly reminders before due dates or offering convenient payment options, can help reduce late payments and improve consistency in your cash inflow.
SIMPLIFYING PAYMENTS In an industry built on convenience and guest experience, the payment process should be just as simple. Implementing online payment tools can make transactions faster and easier for customers. For businesses with recurring monthly services, for example from events, memberships, or regular clients, direct debit systems can ensure a predictable, steady flow of funds and smooth out the peaks and troughs of seasonal trade.
TIGHTENING COST CONTROL Rising costs mean even the small expenses count more than ever. Introducing a clear approval process for all expenditure can prevent surprises. It not only helps track upcoming financial commitments but also helps businesses to strategically time expenditure. Delaying non-essential purchases to maintain liquidity ahead of VAT or rates payments can help manage cash flow.
USING SUPPORT AND FUNDING WISELY Government initiatives such as HMRC payment plans or redundancy assistance can provide crucial breathing space for hospitality businesses. Additionally, exploring funding options from short-term working capital loans to hospitality-specific finance solutions, can offer a lifeline during tougher months. Seeking professional financial advice can ensure that any borrowing remains manageable and strategic.
TURNING CHALLENGE INTO OPPORTUNITY Managing cash can be a lifeline to the hospitality industry. While the current financial landscape presents challenges, it also offers hospitality businesses a moment to reset, plan smarter, and build greater resilience. By taking a proactive approach to forecasting, cash flow management, and cost control, businesses can look to adapt to make themselves more efficient and stronger to be better equipped for long-term success.
Royal Albert Dock Liverpool Strengthens F&B Offering With New Venue Royal Albert Dock Liverpool is continuing to cement its reputation as one of the city’s leading food and drink destinations, as it welcomes independent restaurant Pasta Cosa, opening on Friday 24th October. Founded by sisters Kayleigh and Talia Baccino, the duo behind the much-loved Francie’s Focaccia & Coffee, the new dockside restaurant will mark the second site for Pasta Cosa, building on the success of their original Castle Street location. Known for its freshly made pasta and authentic Italian flavours, Pasta Cosa will bring a vibrant new offering to Royal Albert Dock, where diners can enjoy customisable pasta dishes and waterfront views in a relaxed setting. The new opening is the latest in a series of acclaimed independents choosing to open at the dock, with 25% of its total space, equivalent to 90,000 sq ft, now dedicated to food and beverage. In the past 18 months, more than 4,000 sq ft of new independent food and drink
venues have opened at the dock, including Delhi House and Bar Glue. Together with established favourites such as Maray, Madre, Lunyalita and Rosa’s Thai, these arrivals highlight the dock’s growing role as a culinary destination with a focus on originality, quality and independence. Jacob Loftus, CEO at General Projects, mentions: “We’re delighted to welcome Pasta Cosa to the dock and to have Kayleigh and Talia expand their wonderful business here. It’s fantastic to see that our relationship with existing operators has helped facilitate the growth of Pasta Cosa, all whilst bolstering our ambition to curate a more independent, exciting F&B offering at the dock. “Their commitment to authentic, high-quality food in a welcoming, relaxed setting is a perfect fit for the dock’s vibrant dining scene. We know they will be a huge success and a fantastic addition to our diverse offering, for both residents and visitors.”
Jobs at Risk Across 68 Pizza Hut Dine-In Restaurants Administrators have been appointed to Pizza Hut’s dine-in operations, placing approximately 741 jobs in jeopardy across 68 restaurant sites.
However, the remaining 68 dine-in venues were not included in the rescue package, leaving their future – and that of hundreds of employees – uncertain.
FTI Consulting has been brought in to oversee the administration of DC London Pie Limited, the franchisee operating Pizza Hut’s eat-in establishments across Britain.
The administration proceedings were initiated by Yum! III (UK) Limited, a subsidiary of American hospitality giant Yum! Brands, Inc, which holds security over the business assets.
The development follows financial pressures on the business, including action initiated by tax authorities several weeks ago.
This latest crisis comes less than twelve months after the restaurant portfolio changed hands.
In a significant intervention, international restaurant group Yum! Brands has stepped in to acquire 64 of the affected locations through a pre-packaged administration arrangement.
DC London Pie Limited, operating under the Directional Capital umbrella, acquired 139 UK Pizza Hut locations in a pre-pack administration deal that preserved approximately 3,000 positions.
This move will see roughly 1,277 employees transfer to the new ownership structure under TUPE regulations, including restaurant staff, management personnel and support functions.
Directional Capital’s Pizza Hut franchise operations in Sweden and Denmark remain unaffected by the current UK situation.
The chain’s previous operator, Heart with Smart Limited, collapsed © Copyright Mr Ignavy and licensed for reuse under Creative Commons Licence. with substantial outstanding debts to investment firm Pricoa Capital, Nicolas Burquier, Managing Director for Pizza Hut Europe and Canada, commented on the transaction: “This targeted acquisition which had previously supported a management buyout of the busiaims to safeguard our guest experience and protect jobs where possiness. ble. Our immediate priority is operational continuity at the acquired locations and supporting colleagues The administration marks another challenging chapter for Britain’s casual dining sector, which continues to through the transition.” face headwinds from rising operational costs and changing consumer habits.