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Fri 22nd Nov 2019 - Friday Opinion
Subjects: At your leisure, cautionary positive, pubs play pivotal role in tackling loneliness, and the greatest stories
Authors: Glynn Davis, Gareth Ogden, Nick Mackenzie and Anthony Knight

At your leisure by Glynn Davis 

Last week the retail property industry gathered in Cannes on the south coast of France for MAPIC, its annual jamboree but with an additional day on top of the regular two-day leisure-dedicated programme.

Real storm clouds gathered over the Cote d’Azur during this year’s event but the industry also finds itself in a less than sunny place as it comes to terms with the fact it can no longer rely as heavily on retailers to deliver the necessary returns in shopping centre developments as well as high streets.

Among the property developers and shopping centre managers at MAPIC this year were a smattering of leisure operators, who have become an increasingly attractive proposition for the mix in new developments alongside retail and food and beverage. 

Among them was Dominic Davies, founder of experiential cinema Backyard, and Hugh Knowles, commercial director for UK and Europe at indoor mini-golf concept Puttshack, who was enjoying leisure’s change of perception in the retail developer community.

Knowles says: “The conversations today are different to those before. I was laughed out of meeting rooms and told to come back in five years. Well, we’ve come back and now the conversation is very different. This change has happened over the past 18 months.” 

Against this backdrop Puttshack is eyeing aggressive expansion armed with the £30m it raised in private equity backing, which will take it well beyond its current two sites. Plenty of money is certainly being poured into the UK leisure industry, according to agent Savills, which calculates an incredible £19.8bn was invested last year in emerging leisure sectors alone, including e-sports and virtual reality activities it labels “immersive leisure”. 

Whatever you choose to call it, leisure’s key attraction is it is a great driver of footfall into shopping centres. Research undertaken by Puttshack at its Westfield site revealed a hefty 40% of customers admitted they hadn’t visited the shopping centre in the past year and as many as 20% had never been there before. This, combined with the fact leisure dramatically increases dwell times in centres, highlights its growing appeal.

However, Knowles cautions there’s still a big difference between progressive shopping centre landlords such as Westfield, which views leisure strategically within its overall mix, and those that simply have an empty space and are desperate to fill it – with anything.

This was recognised by one senior executive of Merlin, which operates numerous theme parks and attractions, who revealed at MAPIC there are many players in the shopping centre camp throwing chunky inducements to potential partners, including serious contributions to fit-out costs, long rent-free periods, and very agreeable rental terms.

Despite the sweeteners the Merlin executive wasn’t particularly impressed, recognising those naive approaches were invariably from schemes in the most precarious position. Potential damage to Merlin’s brand names and its ultimate value in the market was too much for it to risk falling in with poor-quality partners.

With such a revolution taking place in shopping centres and the ongoing reduction in reliance on traditional retail as a key revenue generator, there’s surely a growing need to rename these shopping meccas. 

One term bandied around at MAPIC was “brand playgrounds”, which sounds rather promising but, as it stands, the shopping centre world is some way from being a playground. However, with the serious advance of leisure into the mix this could be about to change soon.
Glynn Davis is a leading commentator on retail trends 

Cautionary positive by Gareth Ogden

I would like to reveal an overview of the key findings from this year’s haysmacintyre UK Hospitality Index and what it could mean for the hospitality sector. 

The findings reflect a certain resilience in the sector despite the obvious ongoing challenges. Respondents reported like-for-like sales up 4.2% from last year on average, with 90% remaining positive about their own business’ outlook. That said, the difficult trading environment was reflected by the view only two-fifths (40%) are similarly optimistic about the outlook for the sector as a whole, and less than 50% of respondents said they plan to increase total sites by opening sites in the forthcoming year, down from 68% in 2018.

Current issues
The biggest issue this year’s respondents face is staff recruitment and retention followed by uncertainty generated by Brexit and the ever-changing political and economic climate. Clearly these two issues are related, with more than four-fifths (83%) of respondents believing Brexit would have a negative impact on their ability to recruit staff (compared with 77% in 2018). Rising costs and government red tape also featured highly among issues having an impact on operators.

Future threats
Respondents also identified changing consumer trends and behaviours as key threats for the future and the Index reports operators are reacting to the changing landscape by adapting to customer demands. More than half (52%) of this year’s respondents have partnered with a delivery provider (up from 39% in 2018), while food and drink menus increasingly offer a wider range of healthy and dietary options. Of this year’s respondents, 88% offer gluten-free options, 81% vegan options and 56% dairy-free options. While non and low-alcohol beer has become mainstream, more than two-fifths (43%) of respondents now offer non or low-alcohol spirits (up from 20% in 2018) and 20% non or low-alcohol wine (10% in 2018).

Delivery
Despite the continued increase in delivery sales, the Index reveals it remains a challenge to convert this into bottom-line returns. Almost three-quarters (73%) of respondents indicated delivery has had a negative or neutral impact on profit, almost identical to 2018 (72%). With high commission rates and the risk of cannibalising eat-in sales, many operators are struggling to see the positive impact this growing market will have on their business. Almost three-quarters (74%) of respondents view delivery as a necessity to protect market position or a negative influence on overall business that should be avoided as opposed to an opportunity to be embraced. 

Costs
While rent as a percentage of turnover was consistent with the prior year at an average of 8%, the cost of wages was reported up an average 31% of turnover. Average hourly wages (£9.63) were up on those reported last year, unsurprisingly given recruitment challenges and rises in National Minimum Wage. Average general manager salaries were also up, to £35,500.

If you would like to participate in next year’s Index, email marketing@haysmacintyre.com
Gareth Ogden is partner at haysmacintyre and editor of the haysmacintyre UK Hospitality Index

Pubs play pivotal role in tackling loneliness by Nick Mackenzie 

When I joined Greene King earlier this year it quickly became clear to me pubs play a pivotal role in their communities. Already I’ve seen our pubs do so much, whether providing careers for people of all backgrounds, bringing people together to watch the Rugby World Cup or simply serving as a place for friends and family to gather.

However, research we carried out shows one in five people regularly feel lonely on a Friday night but don’t feel they have anyone to go to the pub with. Increasing numbers of people are speaking up about feeling lonely and isolated, with a growing awareness of loneliness as an issue and its effects on society. With one in five millennials stating they have no friends, it’s clear this is an issue that doesn’t just affect the elderly but people of any age, gender or background.

It’s great to see more people understanding the issue and this has been matched by an increase in activity from charities, businesses and politicians. While these are encouraging signs, given the scope of the problem there’s so much more we, and the wider industry, can do. Many hospitality businesses have a wide footprint across the country and play an important role in their cities, towns and villages. We want to see more organisations doing their bit to tackle social isolation.

Almost two-thirds of people feel lonely at some point in their lives and two-fifths wish they received more offers to go out. Whether it’s trying to find time amid work and family, difficulties in matching schedules or the challenges people face in making friends as they get older, there are so many obstacles that prevent people from socialising as much as they want or require.

Our network of more than 1,700 managed and 1,000 Pub Partners tenanted pubs stretches across the country and provides us with a unique opportunity to reach out to the communities in which we operate and work with them to tackle loneliness. I’m so proud of all the work our pubs have done over the years to lessen loneliness in their communities but we know there’s always more we can do.

This week Greene King launched its No One Alone initiative – a programme of activities that encourage people to come to our pubs to connect with others, build relationships and gain a sense of inclusion within their community. 

We’re keen to work with others as we develop this programme and, by partnering with MeetUpMondays, we’ll deliver free weekly get-togethers at Greene King pubs across the UK. We’ve found simple events, hot drinks and free meeting spaces can have a profound impact on reducing loneliness and boosting health and happiness in our communities.

The beauty of our network means each pub can adapt its offer to best help those facing social isolation. Whether it’s No One Alone quiz nights, social evenings or Loose End Lunches, our pubs can offer the best fit for their community’s needs. Many of our pubs will offer a community table on Christmas Day so people can enjoy time with others on what is often the hardest day to be alone.

This is just the beginning of our initiative and we’ll continue to grow and develop it across our pubs. As part of our commitment, we’ll also look at new initiatives that focus on community and employee inclusion alike. We want to have a lasting impact on our communities and further prove what the industry already knows – that pubs are not only a place to grab a bite to eat or have a drink but also important community spaces where people meet, bond and develop friendships.

We hope our work and the amazing efforts of others in the industry will encourage other industries, charities and the government to work together to fight loneliness in the UK.
Nick Mackenzie is chief executive of Greene King 

The greatest stories by Anthony Knight

I was recently reminded of one of my favourite industry stories. Two shaggy-haired Americans living in London were fed up with the fact they couldn’t find US-style burgers in the capital so they started a small burger joint in a Rolls-Royce dealership. In 1973 they hosted their first live gig, with the singer none other than Paul McCartney. The cafe is still there in Old Park Lane and has hosted live music since. In 1974 the friends stamped their logo on some T-shirts to sponsor a local football team, not knowing those T-shirts would start a worldwide craze. You may have heard of them, their restaurant was called Hard Rock Cafe.

Today, Hard Rock Cafe is one of the most recognised restaurant brands in the world, with 186 sites in 74 countries, but is its offering as unique as it was in 1973? There’s certainly no lack of great restaurants, fantastic burgers and brands offering fabulous experiences out there so what keeps the Hard Rock Cafe brand successful? A good story certainly helps.

One of the things I enjoy most about my job is listening to the stories behind restaurateurs and entrepreneurs, old and new alike. There are highs and lows and you can always learn something. I’d like to share some of those lessons learned and look at what makes a great story.

Write what people want to know
It’s your story but it must illustrate how you serve a consumer need. How did you spot a gap in the market? What did you have to overcome to get the brand where it is today? Why do people love it? Wrap up by explaining how your offer leads to a superior experience for customers.

Make it personal
The best brands engage customers on an emotional level. People want to connect and interact with a concept and be acknowledged as unique individuals. If a story is going to have an impact, it should not only be interesting but also relatable to the people you’re trying to reach. Relevance is important not only to attract interest in the story but also to draw the listener in.

Be clear and concise
In my experience there should be no more than two specific points of brand differentiation that engage customers emotionally. These can include anything from the story behind the food, style of service, signature dish or locations.

Remember, your team are your best storytellers. Have systems in place to make sure stories lived by staff at all levels are easily shareable. In a true storytelling culture, everyone participates. Perhaps you like to blog? How about including guest contributors from across your team to make the website a must-read for food fans? Perhaps the brand suits stories on display around the restaurant – on the menu or noticeboard, for example. Make sure everyone is included and knows how to get their word out.

Make it last
You need to live with the story you tell – and live up to it. Consumers like to know what they’re going to get and value stability and consistency of a story over time. If the story evolves, say so. Take the customer on your journey. When they love a brand, most will willingly get on board.

Be unique
A lot of operators serve great food but they’ll only discover something unique in your restaurant and in your story. Your story should reflect this. What’s your USP?

Don’t fake it
Authenticity and transparency have become paramount for consumers – and they can sniff out insincerity in a heartbeat. Be honest, be real and don’t make promises you can’t keep. If you start a Cuban concept from a kitchen in Kettering, say so – and say why. You’ll have your reasons and you’ve done your research so it’s bound to be a great story.

Sharing a strong and genuine story is one key to successfully marketing your restaurant so take the time to tell it well and ask for help if you need it. Your unique experience will give you an authentic connection to your customers, creating a loyal base to drive success and keep them coming, hungry for the next chapter.
Anthony Knight is managing director of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com

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