McDonalds, Subway Close Down U.K. Takeout Service To Protect Staff And Customers

Topline: More than 5,000 coffee shops and restaurants across Britain will close completely, despite shifting to take-out and delivery services following government orders last on Friday.

• McDonald’s will close all of its 1,270 restaurants in the U.K. by the end of the day, while Subway’s 1,700 franchises will also shut. 
• The restaurants, which had closed their sit-in facilities, had been exempt from closing down their takeout services, but have now completely closed down to protect the wellbeing of their employees.
• Other takeout fast food chains set to close on Monday include Costa coffee chains, which has 2,000 stores, and chicken favorite Nandos, which has 400 restaurants. Sushi chain Itsu will also close.
• McDonalds’ 135,000 employees, many of which are on precarious zero-hours contracts, will have their pay covered until April 5, while Nandos is covering two-weeks’ pay for its 20,000 employees.

• Costa will also cover full pay for their 19,000 employees for the next eight weeks, the company said in a statement.

• The government’s coronavirus financial aid package, which covers up to 80% of the salaries of staff who cannot work because of Covid-19, is expected to kick in by then.

Crucial comment: Paul Pomroy, CEO of McDonald’s UK, said: “Over the last 24 hours, it has become clear that maintaining safe social distancing whilst operating busy takeaway and Drive Thru restaurants is increasingly difficult and therefore we have taken the decision to close every restaurant in the UK and Ireland by 7pm on Monday 23 March.

“I have been clear throughout this that we would only continue to operate whilst it was safe for our people and together with our franchisees, we feel now is the time to make this decision.”

Key background: Prime Minister Boris Johnson on Friday ordered the shutdown of all bars, pubs, restaurants, theatres gyms and cafes, in the most drastic measures yet imposed in the U.K. to contain the spread of coronavirus. Restaurants that operated a takeaway service were exempt.

What to watch for: Whether the U.K. government will enforce stricter measures to encourage people to avoid going out, in step with other European nations that have enforced nationwide lockdowns. It follows a sunny first weekend of Spring in the U.K., which brought people outdoors, despite warnings to avoid coming into close contact with one another.