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Fri 21st Apr 2017 - Friday Opinion
Subjects: Lords and commoners, key trends from the Global Restaurant Investment Forum, London’s pubs do not need additional protection and winning market share 
Authors: Trevor Watson, James Hacon, Paul Chase and Ann Elliott

Lords and commoners by Paul Chase

This month saw the publication of the House of Lords select committee review of the Licensing Act 2003. It also saw the Campaign for Real Ale (CAMRA) members’ weekend in Bournemouth, at which I was a speaker. Having read the House of Lords review I was struck by how most, if not all, of its proposals for change reflected the fact the committee had listened to a range of views and was thereby able to arrive at what were, for the most part, a balanced set of recommendations that avoided siding with some of the more swivel-eyed members of the “public health” community, who of course wanted a public health licensing objective. In that regard it contrasts most sharply with the way in which the chief medical officers’ revised drinking guidelines were compiled – by a who’s who of the modern neo-temperance movement.

The call for the government to abandon the Late Night Levy and Early Morning Alcohol Restriction Orders was also very welcome, as was their lordships acceptance of the value of local partnership working – particularly Business Improvement Districts. Council members sitting on local authority licensing committees should be trained, their lordships said. Here! Here!

I did however find it a little curious the release of the review suggested the committee members found the Licensing Act 2003 to be “fundamentally flawed”. I cannot agree – for the most part I think it works well and I think it is regrettable modifications to it have rowed back from its original radicalism in order to accommodate those who were horrified at what was perceived back in 2003 as a liberalising act. The crux of their lordships’ concern is the view it was a mistake to create new “licensing committees” of council members when a system of planning committees already exists.

No one could argue with the idea that licensing and planning should work closely together – that is why the local planning department is a “responsible authority” under the Licensing Act 2003, and must be notified of any new licence application or application for a major variation of an existing licence. But to combine licensing and planning? In the ten years since the act came into force I have never heard that suggestion made. So, a little “left field” it seems to me – not least because the sale of alcohol will continue to have its own laws and regulations and its own legal precedents. The committee’s recommendation in this regard deserves to be studied carefully, but at first blush this seems a curious proposal.

So we know what the great and the good think of our licensing system, and perhaps by inference of our drinking culture. But what does the ordinary drinker think? Well, on Saturday, 8 April, I had the privilege of addressing about 1,000 CAMRA members at their annual shindig down in Bournemouth. Sometimes the alcohol and society debate seems be conducted between opposing groups consisting of industry players or health lobby fanatics – groups united only by their mutual loathing. The title of my talk “The Modern Anti-Alcohol Movement – Temperance Without the Hymns” does indeed reflect this divide. So I was curious to hear the questions and comments from an audience of informed and influential consumers.

I argued every society from the most ancient to the most modern has had at least one legally or socially accepted intoxicant – something that changes mood, social interaction or consciousness. Ours of course is beverage alcohol. But the widespread use of intoxicants throughout different societies and historical epochs suggests to me the need to change your mood or consciousness is a fundamental human need. As such, in a society like ours, access to beverage alcohol within a legal framework becomes nothing less than a human right and must be defended.

Of course, no one in the modern, ant-alcohol “public health” community would openly call for the outright legal prohibition of alcohol – they know such suggestions would be ridiculed. But “public health” harbours the same prohibitionist ambition as its clerical forbears, albeit prohibition by stealth. It calls for a population-wide reduction in alcohol consumption, but will never tell you to what level. Thus the direction of travel is obvious, but the destination is never mentioned. A bit like Brexit!

I think the drinkers’ voice needs to be heard in this debate. I listened to that voice at CAMRA, down in Bournemouth, and what a passionate voice it was! I was able to announce a new, CAMRA-inspired initiative – the formation of the “Drinkers’ Voice”. This organisation, once set up, will articulate the voice of the consumer – the “ordinary drinker” – in the alcohol-society debate. It is time that voice was heard in the public square. Watch this space.
Paul Chase is a director of CPL Training and a leading commentator on on-trade health and alcohol policy

Key trends from the Global Restaurant Investment Forum by James Hacon

The Global Restaurant Investment Forum welcomed more than 300 industry professionals last week to Fairmont, The Palm Dubai. Several key trends dominated the conversation over the three-day event, from key growth areas such as restaurant delivery, online ordering and digital technology to the need to invest in talent and focus food and beverage businesses around people. 

These were highlighted by keynote speakers, Stuart Gillies, Gordon Ramsay Group chief executive; Amir Nahai, AccorHotels chief executive for food and beverage; and Martin Morales, managing director and chef at Ceviche and Andina Peruvian Restaurants in London. Here are the top ten key trends I identified from the event:

1. Delivery dilemma: It’s undoubtedly the biggest consumer trend affecting our industry right now, but raises lots of debate and questions. Get into bed with one of the big delivery players and you get the best percentage deal – share the love and you’ll probably drive more volume – or – invest in your own peddle power, taking the risk, but perhaps reaping the rewards. Whatever you choose, be sure to make certain you’re not reliant on it and be aware that investors are concerned about what “giving away your customers” means to your business.

2. Brand promiscuity: It’s time to face it, your customers are cheating on you! They’re going elsewhere – even to your direct competitors. The number of brands customers visit is on the rise, with new launches and interesting products elsewhere turning their heads – but it’s your job to make sure they don’t steal the heart too. Figure out what you do, what you stand for and make sure you deliver against your brand promise consistently – keep it simple!

3. Keep it realistic: As well as inflated value expectations, brand owners are often overly ambitious in their business plans, with our investors only remembering one or two occasions when a company has over delivered. Keep it realistic when planning your roll-out – you’re not going to open 100 sites in five years!

4. Know when to walk away: When you’re on a roll-out it’s almost inevitable you’re going to fail from time to time, it’s human nature. Closing a site is the hardest decision to make, but you’ve got to make it, and quickly, for the sake of your business and brand. Investors understand and would prefer to make a commercial decision rather than a sentimental one.

5. It’s all about the chemistry: Whether you’re talking about finding an investor in your business or a franchise partner in another market, it’s all about the chemistry. Make sure you’re upfront, clear in your expectations from the outset and share values. People do business with people, your books and brand could be amazing, but you or your leadership team could cost the transaction.

6. Poles apart: When it comes to the latest food trends, it’s a mixed bag; sweet and decedent is in – but so is healthy and sugar-free. It’s all about the occasion. Plant-bias continues to rise, with vegan and vegetarianism becoming increasingly popular, as well as chef experimenting more with creative vegetable dishes.

7. Instabragging rights: With even the French fine dining establishments allowing photography at the table now, the floodgates are very much open. Customers are no longer just keyboard critics they’re photographers too. Make sure your proposition stands-out from the crowd, but don’t over complicate things. When posting your own content, share a story, not just another food photo. 

8. Crazy levels of competition: There’s very few markets where the competition in the restaurant space isn’t fierce. Brand and site growth is explosive across most of North America, Europe and the Middle East. Expect a five-year return on investment, not the three many brands have come to expect and make sure you cut through the noise by building a multi-faceted lifestyle brand, driving greater awareness and loyalty. Get creative and think differently – if you’re lacking inspiration, just think about how a former Apple executive, turned chef, is taking his brand on a national tour as a stage show!

9. Troublesome travel hubs: Although attractive on paper with the massive footfall and big revenues, travel hubs are far from an easy option for an operator. The commercials are difficult, operations challenging and deals often tied up as multi-site packages. Even the most well respected brands have struggled, but don’t let that put you off. Do your homework, take advice and consider a partnership.

10. Have fun: It might look like all glitz and glam to the outside, but it’s hard work as you know, remember to find the joy in what you do – have fun – be sure to come back next year to catch up with some of the most amazing industry colleagues about your year just past and what’s ahead.
James Hacon is a development, growth and brand strategist for restaurant and hospitality companies, working as brand strategy director at Thai Leisure Group and a select group of other clients. He also chaired the Global Restaurant Investment Forum debate 

London’s pubs do not need additional protection by Trevor Watson 

Why do politicians have this thing about keeping pubs open? Sadiq Khan’s latest intervention in the London pub market is in my view unnecessary and misguided. The London pub and bar market is in good health. Does the mayor not get out much these days? – it seems not. London bars, pubs and restaurants are trading well – offering people what they want and where they want it. 

If the mayor took a short walk of no more than 250 metres in any direction from his South Bank offices he could visit pubs, bars and restaurants of all types and styles imaginable – all doing a fantastic trade and serving the very diverse London community. Many of these will be traditional pubs in historic buildings. And it isn’t just on the South Bank hotspot. Most London pubs (the ones that are well run and well invested) are trading just fine.

There are pubs that are not capable of trading well and are underinvested and these must be allowed to move on and go to a different use. No industry or land use should be fossilised the way some politicians and lobby groups think the pub industry should be. That way lies a stagnant economy that will serve no one with what they want and where they want it. We live in a dynamic economy that is constantly evolving. Changes in land uses are fundamental to that development. 

Imagine how the world of retail – tangible goods retail I mean – would feel if it was prevented from evolving and offering different products. It is inconceivable that shops might be forced to offer people obsolete products that no one wants any more. Libraries, owned by local authorities, are being closed as consumers’ habits change. Councils seem prepared to accept that change despite popular opposition.

The world of food retail is fast changing. The supermarket operators have huge out-of-town monster supermarkets that are rapidly becoming obsolete and may well become of marginal profitability. Are the politicians going to be lobbying to protect them and keep them open against financial logic? – it will be interesting to see.

We know the pub enjoys an emotional association with its customers (and more pertinently its former customers). However, that is not a valid reason not to allow the industry to evolve – the way all industries must evolve to suit a changing society. If politicians insist on setting industries in aspic, we would all still be living in mud huts and castles. It is the relentless burden of taxation that is killing marginal pubs – VAT, liquor duty, rates and national insurance. If politicians really want to help pubs stay in business they know what they need to do – stop using the on-trade as a cash machine. 

The pub sector boasts attractive period buildings that can be visited by the public. The best of these will survive because their character adds to their trading potential. These pubs do not need politicians to protect them. There is no fear that all of London’s historic pubs will be wiped out. In some areas, it might be necessary to rely on listed building legislation to ensure protection of historic buildings. This is consistent with all other sectors such as shops, offices and churches. There is no validity to the politicians’ constant and excessive interference with the pub market.

Some politicians think that closing a pub means the community loses its focal meeting point. I do not accept this viewpoint. All it means is that the community is choosing to meet elsewhere and the pub is no longer fit for purpose as the hub of that community. The community and society have changed – people are choosing to meet elsewhere – in the mosque, Starbucks local gym or local pop-up street food market. The pub industry, especially in London is vibrant and dynamic. It must be allowed to refresh itself and reinvent itself to give people what they want and where they want it. It does not need additional protection. 
Trevor Watson is executive director at Davis Coffer Lyons 
 

Winning market share by Ann Elliott

The general consensus of those I have spoken to recently about the months ahead seems to be that a like-for-like year-to-date sales growth of about 4% is going to be necessary to stay still in the face of rising costs (food cost inflation on its own is currently about 3.9%). The market is, to all extents and purposes, flat at the moment in terms of covers growth with limited food spend per head movement so this is a tall order for many operators. It means the only way to survive is to take market share off others and to be pretty determined about doing so. The question is, of course, how to win market share?

One of the easier options is to drive discounts but that route is fraught with risks, including the impact on profitability, the damage to consumer brand perception and the somewhat inevitable relentless promotional cycle that is then difficult to retreat from. So, what can operators do if discounts are not an option and assuming that the brand is in great shape in terms of offer relevance and consistent delivery? Here are some options:

Drive sales locally
This means recruiting someone (not from the operations team because they need to be focusing 100% on operations) who will go out and visit local offices, shops, taxi drivers, hairdressers, clubs and societies to talk about the business. This could just be for one day a week using someone who is personable, confident and enthusiastic. Armed with a list of whom to visit, a load of cookies and relevant information, they can achieve a huge amount. Just one additional private function a week will pay for this support and it will drive awareness, bookings, database entries, TripAdvisor scores and repeat visits. Ensure the local media too have a permanent open invitation to visit.

Inspire your customers to do your marketing for you
Everything in your business – garden, exteriors, interiors, food, drink, entertainment – needs to be maximised for its potential to be shared by your customers on Instagram, Facebook, Pinterest, WhatsApp, Twitter and via blogs. Does your food look brilliant? Do you have a hero dish that everyone talks about? Do your cocktails look amazing? Is there something really different or quirky about your loos? Customers should be encouraged, inspired and motivated to want to talk about their experiences and to talk about it with others. If they love your business then they will share it with others.

Make it memorable
In a tough trading environment, you need to do everything to ensure your customers remember your business before they remember one of your competitors. It’s worth looking at every aspect of the customer journey (from communications to booking to visit to leaving) to ensure every single aspect is as good, consistent and memorable as it can possibly be. Visiting competitors to experience their customer journey, often provides brilliant inspiration.

Communicate regularly
Of course, genuine and heartfelt customer communication face-to-face is critical on-site but it’s equally critical to communicate with customers once they have left the building. This means building a database (10,000 active emails per site for a business doing about £30,000 a week net seems to be the norm), segmenting this database (ideally by social media profiles) and communicating with it in an engaging and relevant way once every ten days or so. The more personal and bespoke the communication, the better.

Create a community
A business website (that must be mobile friendly) can be a simple point of reference – eg menus, opening times, directions. Alternatively, it can be significantly more interactive – positively encouraging customers to use it as a hub for communication with the business creating an engaged community. Events, recipes, blogs, TripAdvisor reviews and links, bookings, news, new menus, newsletter sign up, comments and feedback can all create a vibrant and engaging experience for customers. As importantly it can be used to help the business really listen to its customers and put in place changes and innovation that its community wants.

This is a resilient and strong sector with brilliant brands and exceptional people – the strong brands with strong consumer connections will survive the storm.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com

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