In certain life and death situations some individuals are reportedly propelled by such a strong will to survive they literally claw, climb over and trample on others to reach safety. It’s an unedifying image but it happens, apparently. The counterpoint in such disaster scenarios is those who lack that compulsive survival instinct succumb to what’s happening around them. 

As has become clear in the past couple of weeks, many hospitality and leisure businesses are getting set for survival mode to do whatever it takes to navigate an unprecedented short-term trading period. They will look to claw and climb their way through the next few weeks as many groups endure sales ranging from substantially down to the bleak prospect of no sales at all.  

The many groups we have spoken to this week are modelling different worst-case scenarios – 20% revenues down, 50% down and 100% loss across all sites for eight to 12 weeks. Multiple sites with fixed costs closed for that length of time is the ultimate doomsday scenario (not one any sane person wants to contemplate) but it’s definitely in the conversation – and it’s a conversation we as an industry need to have. 

One estimate I heard from a senior industry figure this week is that with sales down 20%, operators could run out of cash by May. Propel readers and anyone who caught Channel Four News last night will have seen Wireless Social data revealing a 26% drop in high-street footfall in recent days.

This underlines how rapidly things have changed.  Commenting in the same Channel Four package, organised by UKHospitality, London Union’s Jonathan Downey said: “Ten days ago everything was fine but that has all changed – and the damage has been rapid and dramatic.”

Therefore, the question turns to what do we do? Wednesday’s budget was broadly fine in the context of the normal world. It wasn’t brilliant or a disaster and, while there was a lot in there for smaller businesses, the needs of larger groups were largely and frustratingly ignored – not for the first time. But in the here and now – in the year of coronavirus – the sense was one of overwhelming disappointment in the Budget, bordering on bemusement. As one sector chief executive said in the wake of chancellor Rishi Sunak’s speech: “This budget has come two weeks too early, before the government has grasped the true impact of what is happening and the reality of what is about to happen.”  

In the absence of significant government intervention, there’s an emerging sense companies need to think and act for themselves for self-preservation. Given the volume of conversations between chief executives and the industry’s senior leadership, it’s clear many are minded to effect a form of collective class action by ignoring what may be due in the form of VAT and PAYE, business rates and rent (the next quarter is due on 31 March). One sector chief executive has already written to the local authorities in which their group operates to say they won’t pay rates this month.   

With any luck common sense will prevail and HMRC, landlords and others will recognise the need for support. The principle of Time To Pay (tax holidays in the event of significant revenue drops of 25% or more) is in play and available to operators, with UKHospitality advising businesses to speak to HMRC without delay.  

Groups will also be engaging with their banking partners and, while the chances of raising new facilities might be remote, there may be an opportunity to restructure current arrangements in light of our new, short-term reality. Suppliers will inevitably need to come to the table in these straitened times wearing longer payment terms as hotels and hospitality companies sit on bills and focus on keeping the oxygen of cash in their businesses. 

While everyone will be hoping and looking for better news – as soon as possible, please – this is about planning for and acting on what’s in front of us now. As one operator wrote in a note to me last night: “We are re-running our cash flows for various scenarios. Each one is catastrophic. The best things we can do now are preserve cash and don’t pay anyone; be brutal and cut costs; and agree payment holidays and postponements with HMRC, landlords and anyone else we can.” 

It seems catastrophic but the industry’s energy is quickly focusing on fighting the fight and doing whatever it takes to be around when stability returns. The government will have to wake up – there’s too much on the line and too many jobs at stake. As well as focusing on what we can control, we have to make as much noise as possible. It’s time to scratch and claw.

On Wednesday, new chancellor Rishi Sunak delivered a Budget that, in terms of sector support to mitigate the ongoing impact of coronavirus, fell far short of the significant measures required to safeguard businesses through the coming weeks and months.

Having emerged from the political instability of the previous three years, a lot of positive noises emanated from Westminster in the run-up to Budget day, with signs the chancellor was listening closely to the requests from us and other business groups. 

What may have been a fairly positive raft of measures in “normal” times wasn’t enough given the real threat coronavirus poses to many businesses’ survival. It’s a hugely disappointing outcome.

While we applaud some of the measures announced, including the year-long suspension of business rates for small hospitality businesses, the coronavirus interruption loan scheme of up to £1.2m to support SMEs, and 14 days statutory sick pay refunded to businesses with fewer than 250 employees, larger operators – and the jobs they support – have been ignored at a time of crisis.

The chancellor will point to business rates relief to ease the pain as trade is hit by a drop in footfall, yet the reality is far too many of our venues will be ineligible for that relief because their rateable value is too high or state aid rules outlaw such payments. The perverse nature of the current system is underlined by the fact punishing payments are still expected of companies whose venues may be forced to close.

Almost three-quarters of hospitality business activity is delivered through premises with a rateable value of more than £51,000, so while a rates holiday has been welcomed by smaller operators, it won’t help many that are struggling now. Those businesses are trying to pay their staff and taxes during the crisis while facing tight net margins – less than 3% – meaning they will struggle to survive as the number of customers coming through the door or paying over the counter falls. New data from Wireless Social shows a 26% year-on-year drop in footfall on the high street and while more drastic measures have yet to be introduced in the “delay” phase, the situation is likely to get worse with more people self-isolating or staying away from busy areas.

Similarly, the chancellor will cite steps to ease cash flow problems and not without reason – SMEs will enjoy some of the measures designed to help them. Larger businesses, however, will wonder why, as significant employers and tax contributors, they were left empty-handed after the chancellor closed his red box.

You could argue this Budget has come a fortnight too soon for the sector, before we have a clearer picture of the full impact of the virus and the government’s response. What’s more, this new package of support doesn’t kick in until 6 April – a lot can and will change in the coming weeks so we need intervention now.

We should reflect on the positives – if that’s possible at the moment. At long last there will be a review of the business rates system, due to be completed before the autumn Budget. On the face of it the scope of the review is far reaching, with an acknowledgement by government of the need to modernise and improve the outdated system. 

Those in the sector who have had the misfortune of dealing with the Valuation Office Agency (VOA) will be heartened by news of a £11.5m investment to support the modernisation of VOA systems to improve efficiency and customer experience.

Alcohol duties were frozen across the board, for which we campaigned, and the confirmation of a review of post-Brexit alcohol taxation means we can push for a system that helps hospitality businesses.

Measures that put more money back in the pockets of consumers are, of course, to be welcomed but it’s disappointing the increase in the NIC threshold wasn’t matched by a similar increase for employers, which would have helped boost business investment and jobs, especially given the stepped rises in wage costs.

Additional expenditure on further education colleges was a big positive announcement as they are a vital pipeline into hospitality careers and require significant capital investment. As we prepare to launch a campaign to promote industry careers, a key plank of the Sector Deal, we’ll aim to ensure the sector fully benefits.

While other positives may yet emerge, there’s an equal risk more negatives will become evident as the full impact of policy changes are unpicked. My message to all those running businesses and working in the sector is the UKHospitality team will focus every effort in pressing the government for better outcomes and additional support to help us navigate the choppy waters ahead.

When Amazon launched its Prime subscription service in 2005, many thought founder Jeff Bezos had lost the plot because of a potential loss of hundreds of millions of dollars through offering unlimited shipping for a modest $79 (£63) a year.

The move delivered a welcome recurring revenue stream but the big question among many – including Amazon senior executives – was whether the annual subscription fee would offset the loss of all the postage payments.

This didn’t concern Bezos because he was more interested in whether Prime would achieve his primary objective of hooking people into an Amazon ecosystem whereby free unlimited delivery would ultimately drive significant additional revenue. Amazon needn’t have worried because Prime has been remarkably successful and attracts more than 150 million subscribers around the world who now pay the equivalent of $119 a year.

It has been so successful, massive US-based retailer Walmart recently announced it would launch a subscription service to rival Prime in yet another example of businesses looking to create a recurring revenue stream. The lure has led many retailers to build their operations around locking people into a subscription model, including vegetable box schemes, snack boxes, razor blades and beauty products.

The problem with most of these sellers is they face debilitating customer churn. They have to constantly chase new customers – at great cost – to offset the fall-off of their subscriber base, which invariably suffers fatigue or boredom. That’s why these companies have sought to drive extra revenue beyond subscription fees. Hence the likes of Graze sell a variety of products in major supermarkets, while subscription shaving firm Harry’s has expanded its range with its goods now found in Boots and Superdrug. 

These companies have all found it tough to adapt their models, no doubt because such moves have largely been an afterthought compared with Amazon, where additional revenue was always the primary objective of the subscription exercise. That’s why it’s interesting to see a potentially revolutionary move by US food chain Panera Bread to introduce a coffee subscription service for $8.99 a month.

This enables members to have one free drink every two hours. By a simple calculation this means it takes a mere four visits before the subscription has paid for itself each month. On that basis it sounds madness but looks a similar situation to the one Bezos faced – Panera’s aim is unlimited coffee will drive additional revenues in its restaurants. 

Having got customers over the threshold to pick up their free coffee, Panera’s management hopes they will spend money on other items. The company has cleverly focused on coffee as it represents only 3% of its total sales and is a repeat purchase item as well as complementing Panera’s core offer of sandwiches and other food-to-go items. 

I’d be surprised if this competitively priced subscription offer fails to tempt customers away from other coffee providers and it will be down to Panera to get them to make additional purchases. The foodservice company will be helped by having customers’ details, which will enable it to market to them if they skip into its restaurants solely for free coffee.

It’s hard to believe such subscription programmes can’t be applied to many other food and beverage businesses. I expect to see a lot more of these innovative models introduced as long as they aren’t brought in purely to drive subscription revenues because, as Bezos proved, the eye has to be on the much bigger prize.

On Wednesday, Propel published this month’s Legal Briefing written by Michelle Hazlewood, of solicitors John Gaunt & Partners. While everyone is entitled to their own opinion, they’re not entitled to their own facts – and the briefing got several facts wrong.

Michelle refers to British Medical Journal (BMJ) research revealing a fall in the amount of alcohol sold in Scotland. Firstly, it’s not BMJ research it’s NHS Scotland research – evaluated by the group Monitoring & Evaluating Scotland’s Alcohol Strategy (MESAS) – and secondly it’s based on sales data from market research company Nielsen. The MESAS research indeed shows a fall of 3.5% in the purchase of “pure alcohol” from off-sales premises in Scotland but I would caution against relying on one piece of research on this highly contentious issue. Sales figures produced late last year based on Information Resources Inc (IRI) data show an increase of 2.5 million units of pure alcohol sold in the year after minimum unit pricing (MUP) was introduced, compared with the year before its introduction.

What explains the different outcomes? The market research of both companies comprises three elements:

– Collection of sales data based on bar codes, mostly from the big supermarkets

– Modelling or estimates of sales from discounters Aldi and Lidl, which don’t give sales data to market research companies

– Converting volumes of beverage alcohol sold in litres into units of “pure alcohol”

I suspect we’ll discover the reason for the different outcomes in the analysis. Analysts of the IRI data converted volume sales into unit sales on a product by product basis – giving an outcome that reflected the granular detail of sales. The MESAS analysts converted volume sales into unit sales by lumping product sales into categories. For example, it assumed all spirits have an alcohol by volume of 37.5%, with similar assumptions made about wine, beer and cider. This raises a question – why give up the opportunity to arrive at a detailed analysis of sales and replace it with category assumptions? This is down to lazy analysts or someone seeking to arrive at a result that pleases policy makers – the latter would be my guess!

Michelle goes on to write: “The reasoning behind MUP is well known – making formerly cheap, high-strength drinks significantly more expensive will lead to health benefits as people turn away from products such as white cider.” But what did they turn to? White cider sales fell by 56.9 million units, perry by 10.7 million and wine 6.7 million. However, sales of lager rose 34.6 million, fortified wine 13.5 million, ready-to-drinks 12.5 million, spirits 7.5 million, ale 8.3 million and stout 0.4 million. In total, there was an increase in sales of pure alcohol of 2.5 million units.

Then Michelle writes: “However, figures suggesting MUP has significantly cut alcohol-related deaths in Scotland will surely prove compelling evidence for those who are keen to see it adopted in England.” Except they don’t say that. Scottish politicians cherry-picked some health stats for publicity that showed a fall in alcohol-related deaths in some areas of Scotland but neglected to mention areas where they rose. Overall, alcohol-related deaths in Scotland rose from 1,120 to 1,136 (up 1.4%) in the year after MUP’s introduction. So did the number of alcohol-related hospital admissions – from 38,199 to 38,370. This is only a small rise but contrast it with the prediction by Sheffield University researchers there would be 1,299 fewer hospital admissions in year one of MUP. Not exactly “compelling evidence”.

Michelle points out several “grey areas” around complying with minimum pricing legislation – promotions where alcohol is part of a fixed-price package. She describes these as a “veritable minefield” but all reports coming out of Scotland show compliance with minimum pricing legislation has been almost universal – so let’s not raise scare stories about what might happen in Wales.

Is England next for MUP? Michelle evidently thinks so but I don’t – at least not any time soon. The UK government has announced there will be no new alcohol strategy and it has no plans to legislate for MUP. A government keen on establishing its “levelling-up” credentials is unlikely to introduce a law that raises the cost of living for people in the lowest income quintile, particularly when the locus of heavy drinking is mostly the top two income quintiles – and they’re not buying cheap booze and won’t be affected by MUP.

I was working at Virgin looking after the brand globally, which incorporated group brand management, customer service standards, internal culture and virgin.com. We were working hard but constantly having parties all over the world. What started out as raucous fun started to become a toxic lifestyle – 17 years of drinking and eating too much crept up on me – so I left Virgin to become healthier and leave a healthier footprint on planet Earth.  

I wanted to create a brand that was cool on the outside but with a heart of gold. I carried out a lot of research into global wellness and spotted some interesting trends such as the modern hippy chic developing out of Byron Bay in Australia and the constant adoption of Los Angeles health and beauty ideas, which people dismissed as fads, into worldwide trends.   

The more research I carried out, the more it pointed towards a gap in the market. This was 2013 and there weren’t any bar restaurants in London in which you could socialise without toxins and temptations to spoil your health or that of the planet. Hence Redemption was born, with the first pop-up opening in 2014.

Entrepreneurialism is like a bug – and I caught it from Sir Richard Branson. It’s a passion for spotting gaps in the market and having a vision about making it happen – a vision so strong you can’t stop thinking or dreaming about it and you’ll gamble everything to make it happen. I also read an interview with Olympic athlete Dame Kelly Holmes. Everything she said about training to win resonated with me and inspired me to continue with Redemption. When you fail, pick yourself up and keep going – often you start winning once you’ve worked though great hardship and seemingly endless bad luck.

Looking ahead in business is tricky because the secret of happiness is to live in the moment but the secret of business appears to be being constantly anxious about every eventuality! Our biggest challenges are probably the rising cost of living leading to a rising cost of staffing, and resources such as food and water becoming scarce. We’ll have to become ever more efficient but I hope technology will provide some answers. For example we have a great system, Seven Rooms, which manages table bookings and communicates with customers, while we use an app called Karma to distribute leftover food. We’ve been approached by new apps that work out personalised nutrition plans and deliver food to customers accordingly and anyone who has checked out our Instagram page will know that’s our main platform for communicating the Redemption brand.

Some simple advice would be to become more assured and less sensitive. At the end of each day I tend to evaluate all the interactions and communications I’ve had with others to see if I could have done it better. I’m quite tough on myself and I’m pretty sure this is more commonly a female rather than a male trait, although I’m not sure how healthy it is! I often try to be more like my brother, Nick, who would make a great entrepreneur as he doesn’t care what people think of him and sleeps soundly at night.   

 

A lot of people told me not to start my own business. I didn’t listen to a single one of them, which is a shame because I could have had a much easier life! I think if your vision is strong you must go for it, as it’s better to have tried and failed than to have never tried at all.

 

International Women’s Day was significant as we can celebrate and encourage women. We’ve met some wonderful, like-minded and inspiring women within Seven Dials and on our journey to where we are now – and we hope we can inspire others to be brave too.