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Mon 30th Sep 2013 - Tax Parity Day – the verdict
Tax Parity Day – the verdict: As many as 15,000 pubs and restaurants took part in Tax Parity Day last Wednesday, reducing prices by 7.5% to show the benefits to customers of lower VAT in the sector. Below, campaign organiser Jacques Borel and 12 companies who part in the event report back on their experiences on the day:

Tax Parity Day conclusion by Jacques Borel: “Tax Parity Day was an outstanding success with companies taking part reporting that it was a wonderful way to reinforce our message that lower VAT in our sector will deliver lower prices and create hundreds of thousands of jobs. Many operators who took part in the day reported a large uplift in sales and report that it was a wonderful way to show customers the benefits to them of our campaign goals. Tax Parity Day also attracted substantial media interest, with numerous TV and radio interviews – and our newspapers clippings file already contains several hundred stories. Customers in significant numbers were surprised at the disparity between the zero rate for food in supermarkets and 20% VAT rate for pubs and restaurants. This injustice will be the major angle of the campaign going forward.”

Jens Hofma, managing director, Pizza Hut: "Both our guests and our team members responded very positively to Tax Parity Day. For many it came as a surprise that there is such a large gap in VAT between restaurants and supermarkets. The reactions received during the day made us feel even stronger about the injustice of penalising the restaurant and pub sector through unequal VAT treatment, despite the fact that we are one of the major providers of much-needed jobs in the country."

Simon Emeny, chief executive, Fuller Smith & Turner
: "All Fuller's managed houses took part in Tax Parity Day and we were delighted to see a significant uplift in the number of customers using our pubs. We believe it goes to show that a reduction in the disparity in VAT levels between supermarkets and our sector would encourage new customers to socialise in pubs and restaurants. This would not only be beneficial for the economy but also, in the long term, stimulate additional employment."

James Staughton, managing director, St Austell Brewery:
“The campaign was successful in highlighting the fact that this is an important national challenge and yet is also a great opportunity. But it has also raised the fact that this is a significant issue for the South West as well, which is so reliant on tourism and hospitality. In our own pubs, we witnessed a 10% uplift in like-for-like food and drink sales, which demonstrates that a cut in VAT for the industry can bring more people into pubs and therefore generate economic activity and ultimately create jobs. We hope that the government looks at the issue of fair taxes for pubs and restaurants as matter of urgency. 10,000 pubs closing down in the last few years is a clear sign that the current tax regime is unsustainable.”

Tim Martin, chairman, JD Wetherspoon:
“Tax Parity Day was an outstanding success in our pubs across the UK, with approximately 20% more pints and meals sold on the day. Customers welcomed the lower prices on food and drink and also engaged with our staff to learn more about the campaign and the reasons behind it. Tax Parity Day was also a great way of highlighting the great British pub.”

Stuart Bateman, managing director, Batemans:
“A number of our pubs took part in the VAT Parity day, and there were unexpected but interesting results. We reduced the price of drink and food in the participating pubs ,which included our Visitors’ Centre, so that we could closely monitor the effect. Not only was the take up in our Visitors’ Centre by just under 20%, but we found that the majority of additional customers were over 55 and were trying the stronger ABV beers, not in pints, but in halves or thirds. Not only did we see customers who do not usually visit us during the week, but we also met new customers who have promised to return. Any regrets on the day? Yes – we wish we’d put another member of bar staff on!”

Gary Roberts, operations director, Amber Taverns:
“On the day, sales increased between 10 to 23% – the higher figure mainly in the north west sites that had the benefit of the televised Man United versus Liverpool cup game in the evening. The activity prompted discussion and retained customers a little longer. The exercise did create awareness among customers, with many surprised that supermarkets do not pay the same level of VAT.”

Brian Whiting, managing director, Whiting & Hammond: “It was a very successful day. Our customers seemed generally interested and very surprised how much of their bill went in VAT – they loved the reduction for the day and I have no doubt  this was a great exercise to do. All who engaged in the conversations with the crew at the pubs were on our side. The managers reported that they got the real sense of injustice with supermarkets selling value-added items like 'A gastro-pub style steak & kidney pie' and not having to add the VAT!”

William Allingham, founder, Steamin’ Billy Brewing Company:
“We asked all of our supply partners to use our pubs on the day – about 75% were represented.”

Matthew Sankey, founder, Sankeys:  “I’ve got to say I was pleasantly surprised by the reaction of our customers. Our customers all enjoyed the 7.5% reduction in costs, but what they really liked was the additional staff we laid on. I think this is going to be the key to this policy. Our ability, potentially, to be able to afford to employ additional staff has such a massive effect on the service we offer and that is what customers really want – better service. I’m not saying that we are not any good at service in the country but we are nowhere near our continental rivals. This proposed cut in VAT might just be the ticket.”

David Hoare, retail director, Hall & Woodhouse: “It seemed to go like a breeze. We felt the message – VAT to 5% but we’ll only reduce prices by 7.5% – was too complicated so we actually effectively reduced prices to 5% VAT. This avoided any tiresome debates between team and guests and was incredibly easy to communicate.”

Gavin George chief executive, InnBrighton: “The day was positive for us and the discounts were well received by our customers. It has been an opportunity to explain the concept of "parity", which was not well understood previously. The North Laine has, since its opening last year, sold a selected ale every week at VAY and duty paid, to show our customers just how much of the pint is given over to the government. There are no plans to stop doing that.”

Peter Furness-Smith, managing director, McMullen: “The day has been a huge success from the perspective of communicating to our staff and customers.  We have had good initial feedback from our managers on the following points, which is encouraging: how over-taxed pubs are and how little support we get from our political classes; how VAT policy supports supermarkets and encourages irresponsible drinking; how many jobs for the young could be created by a significant cut in VAT for pubs. The impact on sales has been mixed. Those managers who have better promoted the day have showed good growth in Wednesday's sales on both last year and last week. Overall sales on Wednesday were flat against last year but up on last Wednesday. It was definitely worth doing.”


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