Upper Crust Owner May Cut 5,000 Jobs As Pandemic Hits Sales
The owner of Upper Crust and Caffè Ritazza may cut up to 5,000 jobs in Britain because the COVID-19 pandemic has hit sales hard at its food and drink outlets in airports and train stations, their owner, SSP, has said.
The company said that it only expects a fifth of its stores in Britain, where it employs approximately 9,000 people, to open by autumn as the number of train passengers has slumped 85% from last year while airports have been largely closed.
SSP, which operates food and beverage outlets in airports and train stations in 36 countries, had approximately 40,000 employees before the COVID-19 pandemic and expects restructuring in Britain to cost up to £10 million.
SSP shares have fallen 61% so far this year.
"We are beginning to see early signs of recovery in some parts of the world and are starting to open units as passenger demand picks up. However, in the UK the pace of the recovery continues to be slow," CEO Simon Smith said.
Overall, SSP sales recovered slightly in June, though they were still approximately 90% lower than last year, with stronger performances in continental Europe and North America being offset by lower sales in Britain and the rest of the world, it said.
"SSP has not started any material restructuring in other geographies given a more rapid expected recovery, but we think the potential for this could be an overhang for investors going forward, as the recovery develops," Jefferies analysts said.
Air Bridges And The Summer Holiday Season
Air bridges and the summer holiday season may bring back demand for short-haul flights in July at a lower capacity, SSP said, adding that long-haul travel is expected to remain at extremely low levels.
Sky News first reported the job cuts.