The company behind railway station and airport chains Upper Crust and Caffe Ritazza is cutting head office staff and laying off workers temporarily as it warned of a coronavirus earnings hit of up to £60 million this month.
SSP – which also operates Starbucks and Burger King outlets in travel locations – said a “large number” of its 6,700 UK workers have been laid off while its sites are temporarily closed due to closures amid the Covid-19 lockdown.
While it said there have been a small number of job cuts at head office level, the group said it is hoping to keep affected store staff on the payroll by accessing government support schemes in the UK and across Europe.
It is also making “significant” cuts to senior management and executive salaries to help slash costs – including for the chief executive and board members.
SSP employs around 30,000 staff worldwide and has 2,500 outlets.
The firm warned that it has seen sales decimated as travel restrictions worldwide and lockdowns have taken their toll, and is bracing for a potential fall in revenues of as much as 85% in the second half.
Sales are likely to plunge by 45% in March, which it said is set to cost it around £50 million to £60 million in lost earnings.
On the outlook, it said: “SSP has considered a very pessimistic scenario, assuming an almost total shutdown of the travel market for the whole of the second half of the financial year, with group revenue being down approximately 80% to 85% in the second half against the same period last year.
“This reflects a worsening revenue impact in the third quarter of the financial year (down 85%) and only minimal improvement in the fourth quarter (down 80%).”
But the company is hoping to mitigate some of the impact on the bottom line with actions to cut costs, including outlet closures and reduced opening hours for sites that remain open, pausing its expansion plans, and negotiating rent cuts with landlords.
SSP Group chief executive Simon Smith said: “In common with the sector, we have seen a very sharp drop-off in passenger numbers and this has heavily impacted SSP revenues.
“We’ve had to take significant action to reduce our costs while doing everything we can to limit the impact of this on our colleagues.
“However, we have had to close a number of units, given the extent to which passenger numbers have decreased.
“These decisions have not been taken lightly and I sincerely hope that we can reopen our units and welcome back our teams as soon as possible.”