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Fri 1st Dec 2017 - Friday Opinion
Subjects: Declining car ownership driving change in the hospitality sector, ideology versus common sense and improving staff engagement
Authors: Glynn Davis, Paul Chase and Martin Dinkele

Declining car ownership driving change in the hospitality sector by Glynn Davis

Now I wouldn’t exactly say I was a trendsetter but my eschewing of car ownership seems to have made me something of a pioneer. The fact is I’ve had a driving licence for about 35 years and never owned a car, which has in the past made me slightly unusual.

But maybe I’m not so weird today because it seems the youngsters are cottoning on to my way of thinking. Certainly those in larger cities are showing just as little appetite for car ownership as me and a lot less than previous generations. Back in the day it was pretty much a rite of passage to take driving lessons and get yourself a licence as soon as you turned 17 years old.

This is losing its appeal for a growing number of people – for a variety of reasons. The high cost of car ownership (including fuel and prohibitively expensive insurance), the availability of car share schemes, greater recognition of the impact of cars on the environment, the emergence of app-driven services such as Uber, and an increasingly unfavourable view of cars as simply vehicles that clog up town centres and high streets have all driven a different mentality around cars.

Consequently motor sales are affected as shown by the past seven months of consecutive decline (up to the latest figures in October), according to the Society of Motor Manufacturers & Traders. This is serious stuff and if such a trend continues then the effect on our daily lives will be profound. 

Affected sectors include the leisure and hospitality industry. It is arguably already impacting the way businesses in the sector operate. I’d suggest the surge in home delivery is partly driven by the reduction in car ownership among younger people because if the restaurant is close enough to walk to then that’s fine but if it requires a car then delivery is the only solution. 

What is particularly interesting – and has possibly been a little overlooked – is the future role of the car park and the part it plays in the food and beverage sector. As their importance diminishes the space they take up will increasingly be utilised for other purposes. We are already seeing Deliveroo step in and use former car parks for some of its Editions sites. These brownfield sites are often located close to where plenty of people live and so they make perfect sites for housing a number of the delivery-only Editions kitchens that require proximity to customers but do not need any footfall.

Another example of car park reuse is taking place in Peckham where a seven-storey block is being transformed into a cultural hub that involves the top two floors of the structure being converted into a home for a selection of food and drink traders along with bars specialising in cocktails and natural wine.

Car parks are also increasingly being used as the locations for food markets around the country. These invariably start on a weekly or monthly basis but the popularity of such ventures will inevitably lead to some permanency. 

If we played this scenario out then we are looking at the car park becoming a redundant feature in the townscapes of the future. Certainly their role has been downgraded at the King’s Cross development in north London where the number of car parking spaces required for the residential parts of the site have been halved since the plans were originally drawn up. Many of the owners do not require them and so more space can be allocated to food and beverage and other leisure activities within the development. 

This relegation of the role of the car is also evident in the recent announcement that part of Oxford Street is to be pedestrianised, which follows similar initiatives with other town centre thoroughfares. It immediately opens up the possibility for bars and restaurants on these roads to expand their footprints by introducing tables and chairs. There is also the opportunity for new foodservice operators and street food vendors to take up residence on these formerly car and bus-clogged roads. 

As a resident of London there looks to be very few trends taking place that are likely to prompt me to change my long-standing position and suddenly take ownership of a car. Especially when in all likelihood we will soon have self-driving cars on our roads that can be shared or hired and which have no real reason to be owned by individuals.
Glynn Davis is a leading commentator on retail trends
 

Ideology versus common sense by Paul Chase

Oh, what a rush it’s in! The Scottish government has placed a commencement order before the Scottish Parliament to enable the implementation of the Alcohol (Minimum Pricing) (Scotland) Act 2012. This would amend the Licensing (Scotland) Act 2005 and the premises licences granted by that act. As a result, from Wednesday, 6 December, Scottish ministers will have the power to specify by order the minimum price per unit of alcohol. 

It is worthy of note that while the introduction of minimum pricing required primary legislation, the setting of that price will in future be by way of Scottish Statutory Instrument – ministers will decide. So, the level set will become almost a secondary matter now that the principle has been established. No prizes for guessing the direction in which it will move.
 
Let’s just revisit some of the logic around this measure. Remember what Scottish ministers have said: “Minimum pricing will save lives.” The latest predictions from the Sheffield Alcohol Research Group (SARG) are a 50p unit price will reduce alcohol consumption by 3.5%, and as a direct result of this fall in consumption the number of alcohol-related deaths will fall by 58 in the first year and by 102 per annum after ten years. In Scotland, the alcohol-related mortality statistics jump up and down year-on-year by more than SARG’s predictions in any event, so it will be impossible to know whether minimum unit pricing has “worked” or not. For example, the number of alcohol-related deaths in Scotland fell by 129 between 2008 and 2009; they increased by 115 between 2015 and 2016. In both cases there is no apparent reason for this variation.
 
So, all this time the Scottish government has campaigned for a measure that the impact of which is vanishingly small even if you accept the (very likely) exaggerated predictions of SARG. This suggests to me the symbolic victory of the Scottish government over “Big Alcohol” on this issue was always more important than any practical outcome from the policy itself. This is a policy that is driven by ideology, not science and certainly not common sense.
 
That brings me to the chief medical officers’ low-risk drinking guidelines. We now know, thanks to the FOI requests made by Chris Snowdon, the Guidelines Development Group set up by Public Health England (PHE) prevailed upon SARG to massage the statistics to produce the recommendation of 14 units a week for men and women. What I didn’t know until recently was a completely different approach to sensible drinking advice was presented to PHE and rejected.
 
Professor Sir David Spiegelhalter, who is president of the Royal Statistical Society, argues the current system of drinking limits should be replaced by a traffic light system that would present a sliding scale of risk to drinkers. Men drinking above 50 units a week, and women drinking above 35 units a week should consider themselves in the “red zone” – at high risk of an alcohol-related illness. The “low-risk” zone of 14 units a week or fewer should become aspirational with people in the “amber zone” between low and high-risk consumption being encouraged to cut down. Sir David said: “There’s a sliding scale of risk, which combined with the scientific uncertainties means there are no hard boundaries between what is an acceptable and an unacceptable risk. Having separate low-risk and high-risk thresholds might help prevent the idea that anything above the current guidelines was dangerous.”
 
This approach seems to me to be practical, realistic and just eminently sensible, which is probably why it was rejected by the ideologues at PHE.
 
The extent to which alcohol as a problem has been exaggerated is extraordinary. Here is one final statistic that illustrates the point. According to the Health and Social Care Information Centre, in 2015-2016 there were 339,280 alcohol-related hospital admissions in England. This is for admissions where the primary diagnoses were for medical conditions wholly or partly caused by alcohol, or where the admission had a secondary diagnosis that is an “external cause” (such as being injured in a drunken brawl). In total, there were 16,251,841 hospital admissions in England for all causes. So, the admissions generated by alcohol misuse accounted for just 2.09% of the total. And this is the basis upon which public health ideologues claim alcohol misuse will “bankrupt the NHS”.
 
The moral panic continues and shows no sign of abating.
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy
 

Improving staff engagement by Martin Dinkele

We can’t miss the headlines that staff recruitment is the number one headache for restaurant operators. With staff turnover rates of more than 100% being the norm in the industry, finding and keeping good staff is one of the biggest challenges operators face to stay competitive. One chief executive of an expanding London-based pub company told me his biggest challenge isn’t attracting customers, it’s attracting chefs. In my home city of Cambridge almost every pub I walk past is advertising for staff.

It’s not easy. For many, hospitality is a short-term job to pay the bills, not a long-term vocation. A recent Cardinal survey showed half of all millennials didn’t know companies such as Costa, McDonald’s and Greene King offered apprenticeships. The survey also highlighted long, late hours is the number one factor putting off this generation from working in the sector, followed by having to deal with awkward/rude/lecherous customers. Addressing these issues will help but they only form part of the solution.

Reducing staff turnover is key. At the recent British Institute of Innkeeping People and Training Conference we heard some great examples of operators trying to do this. Marco Reick, of Leon, told the audience about how the company focused on staff well-being – for example by paying staff with skills such as yoga teaching and martial arts to run sessions with co-workers, training its head baristas in the ancient martial art Wing Tsun to stay relaxed, and holding bi-annual well-being retreats for its workers. 

Jill Scatchard, of Oakman Inns, told the audience all about its online staff training and development scheme called Oakmanology – a programme that has put the company in the top ten of the Sunday Times Best Places to Work in 2017. Tim Painter, of Stonegate, told us it took 100 managers who had come up through the business to the House of Commons for a party – and 60 MPs from constituencies where these pubs were located turned up.

Our research with staff at a number of restaurant operators, alongside guest satisfaction surveys at the same companies, highlights a clear pattern – happy staff = happy guests = healthy business. And of course this is well supported by academic research across different industries. But how do you most effectively engage with staff in the restaurant sector? We have developed a survey-based employee engagement framework that has three dimensions. It can help understand where to prioritise HR effort.

1. Individual engagement: This takes place at a personal level – the fulfilment an employee gets from their job, the level of empowerment they are given to do their job well and the development they receive to perform.

2. Local engagement: This takes place at site level – the relationships people and teams form with each other, the quality of the communication and the appreciation managers show to their people.

3. Brand engagement: This takes place at an organisational level – the leadership set the tone, the level of pride in the offer, the current momentum felt at the front line and the reward levels on offer.

Of course all of these are correlated with staff advocacy, but it is brand engagement that is the strongest driver. Brand engagement means staff believe in the leadership and buy into the vision and values of the business; it means staff believe in the quality of product they are delivering, that the experience justifies the prices charged and the business has an environmental conscience; and it means staff are excited to be part of a growing business, which they think they have a future in and it’s a business that is always looking to improve their offer.

Our analysis highlights restaurant brands that stand for something, with inspirational hands-on leaders and a mentality focused on optimising customer satisfaction rather than what they can get away with, are likely to attract the best staff in the first place and inspire those who join to stay and work hard. The same values also seem to attract customers and keep them coming back.
Martin Dinkele heads Cardinal, the drinks industry and licensed trade research specialist. Cardinal is part of Morar HPI, which runs Brand Vue Eating Out, a survey with 100,000 interviews a year, covering 140 of the best-known eating out brands in the UK. For more information about Brand Vue or its survey-based employee engagement framework, email martin.dinkele@cardinalresearch.com

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