Amongst the many never before seen circumstances surrounding the current COVID-19 pandemic is the speed at which the situation changes. It is changing faster than anything I have ever witnessed, and the one constant is the direction it is going, negative.
This is particularly alien to realise and absorb if you are of a positive disposition. Your natural instinct is to flip any situation and look for the positive, but as news emerges, by the second, all of it is hard, if not nigh on impossible to flip.
As a natural optimist I almost feel guilty writing this, but realism is what is required and recognising the scale and scope of the situation needs to precede preparing to deal with it.
The situation around the world is changing constantly and that is echoed in the UK.
In our recent reporting we have focused on indicators from financial markets as the people, governments and banks, with the money react to what’s happening. These are the people with the best access to information.
Whilst stock markets around the world last week saw losses that were last witnessed in the 1980’s the fall in the price of gold, circa 10% in a week, is of far more concern. Gold is ‘always’ seen as the safe haven in times of crisis in financial markets, not last week.
Most that are reporting on this conundrum indicate clearly that liquidity is being sought from selling gold to pay for and try to stabilise losses in other financial instruments. Reminding investors that cash really is king.
Cash is King and will be in the days, weeks and months ahead for hospitality and catering businesses, reliant upon people walking in a door.
It is already evident that people are self-imposing social distancing and as a consequence restaurants, pubs, coffee shops and all other food and drink outlets are seeing a significant reduction in footfall. Footfall will be lower today than it was yesterday, and this pattern will continue for the foreseeable future. Needless to say hotels will soon be all but empty.
So, given that we are facing a slow down of unprecedented scope and scale what can be done?
A macro rather than micro, or strategic rather than tactical view needs to be taken.
The speed of change is nigh on impossible to monitor so anticipating change is required. Fewer and fewer people will be walking in your hospitality door, just look at what happened in Italy last week, it will happen here too and sooner than most think.
When that happens tills and epos systems are no longer required to take money in, but invoices will continue to present themselves to your inbox.
Drastic cost cutting will be required, it will not be a choice, you will have to do it. Identifying only what you truly need to weather the storm is your only option.
Following the example of what governments and banks around the world are already doing, you need to focus on cash being king.
I was astonished that financial markets yesterday didn’t plummet further especially before the weekend. As two days in the current climate is a lifetime where there is no access to adjust to change. The speed of the one directional information currently suggests that eternal optimists are wrong in hoping for a short term change of direction, I can’t see that coming. Financial markets will plummet on Monday as a result of changes this weekend that can’t be adjusted for until then.
I am still optimistic in many ways, and life will continue, but dealing with the current business situation will require ice cold pragmatism with immediate effect.
