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Fri 5th Jun 2020 - Friday Opinion
Subjects: For my daughter, my mum and hospitality; the delivery market post-covid-19; and insightful interviews
Authors: Julian Ross, Gareth Ogden and Ann Elliott 

For my daughter, my mum and hospitality by Julian Ross

For the past three months, since the coronavirus changed from being “it's just the flu with a different name” to “everyone hide, there's a mad killer on the loose”, I've been chatting to my mum and my daughter, pretty much every day. The topic of conversation almost always revolves around coronavirus, and how scared we ought to be, or whether Boris is making the right decisions, or if there'll be a second spike etc (my daughter is mature for her age!) 

Throughout the same time period, I've also been having dozens of conversations with my friends and colleagues across the hospitality sector, while everyone has been trying to make sense of the impact on their businesses. We've all been running scenarios on Excel spreadsheets and modelling different reopening timetables, with various social distancing scenarios thrown in for good measure. It's also been really terrible to read about the mounting death toll in the UK, and hearing from people who've suffered from coronavirus. My heartfelt sympathies go out to anyone reading this who has suffered directly, or indirectly, from coronavirus.
 
For my mum and my daughter, the conversations have been life and death, literally. My mum is a very tough Yorkshire lady – we lost dad in December and mum is all too aware how short life is. Mum is almost 80 and she just wants to be able to go and make the most of life, which for her is a bit (okay a lot) of shopping, and lots of cuddles from her four kids and her grandchildren. My daughter is 12 and worries about how the virus could hurt her, or her mum or myself. She's also missing school and playing/socialising with her friends.
 
For hospitality, and for government, it's all about weighing up the risks. Nobody wants to make decisions that will kill people. Regardless of how we've arrived at where we are now, we are where we are. However, people are making emotional life choices and it seems to me, knowingly, or otherwise, clear and concise facts are hard to find. So, for my daughter and my mum primarily, and for people in hospitality with whom I've been chatting, I decided to dig out facts that would hopefully help. To be clear, my main focus here is to make sure my daughter won’t worry unnecessarily. Very handily, we've recently been home-schooling on probability and statistics! 
 
The question is simple: What's the likelihood of dying from coronavirus? All of my analysis has been taken from the Office for National Statistics (ONS), except where I've noted otherwise, and is based on England and Wales data.
 
Week 21 – 12,288 deaths in England and Wales (week ending 22 May)
This number is 2,348 higher than the average number of people who have died in the same week, based on the average of the past five years. The population of England and Wales is believed to be a shade over 59.1 million, based on June 2019 data estimates. The annual population growth over the past five years has hovered between 0.6% and 0.7%, meaning the compound growth over that period is about 3.3%, so about half of that, or about 200 deaths could be attributed to that skew. 

The total deaths that mention covid-19 as a contributory cause amounted to 2,589, which represents 21.1% of all deaths in England and Wales that week, Places of death during the week were hospital (64.2%), care homes (29.1%), home (4.5%) and hospices (1.3%).

There have been 276,000 confirmed cases, with 39,000 deaths, which equates to a mortality percentage of 14.1%. As of Thursday (4 June), 4.48 million tests had been conducted, almost all being either people at risk or showing symptoms, meaning 6.16% tested positive. A government sponsored study on 21 May suggested, at that time, at least 5% of the population has already had coronavirus, with that number believed to be 17% in London. This would suggest, at the very least, 5% of 59.1 million people has already contracted the virus, or about 2.95 million. A truer reflexion of the mortality rate is therefore 39,000 divided by 2.95 million, which equals 1.32% (possibly lower, as the deaths number is up to 2 June, whereas the study was conducted on 21 May to establish who has already contracted the disease).
 
How old were the 2,589 people who passed away? As we anecdotally know, a significant majority of those who have lost their lives have been older. More than two-thirds of those who died were 80-plus, with a further 20% being 70-plus. Less than 2% of deaths were people below 50.
 
What percentage of people have underlying health conditions? 
The following data has been taken from all of March Covid related deaths, as this is the latest data available from ONS: Total covid-19 related deaths in March was 3,912. A total of 91.5% of males 70-plus who died had underlying health conditions; 91.9% of females 70-plus who died had underlying health conditions; 88.3% of males below 70 who died had underlying health conditions; and 89.4% of females below 70 who died had underlying health conditions.
 
So, what does all this mean? Let's assume for a minute everyone in England and Wales were to contract the virus – so that's 59.1 million people. I'm going to make the assumption for my daughter that everyone gets ill at different times, just so I don't have to add in a coefficient for the possible increase in mortalities owing to the NHS falling over. I think that's fair enough, since I'm also giving everyone the illness, which is extremely unlikely to happen too!
 
Firstly, how many people may die – 59.1 million multiplied by 1.32% equals 780,000. This is a huge number, but it doesn't take into account any level of protection that would be offered to those who are most at risk. Nor does it take account of any possible herd immunity that would be likely to slow down and stop the virus spreading, long before we reach such a number of mortalities. To understand risk, we can break down the number and hopefully help my daughter and my mum to see their respective risk. Using the ratios from week 21 data, above, we can look at how different age groups might fair in such a scenario:
 
Potential split of deaths, if everyone contracted coronavirus
As before, the vast majority of people to lose their lives would be those 70-plus – a total of 680,160, representing almost 88% of all deaths. If all people in England and Wales contracted the virus then we'd likely see 14,820 deaths for people below 50, representing 1.9%.
 
What about if we take away those with serious underlying health conditions?
Neither my mum, or my daughter (or I) have underlying health conditions that are deemed to be serious enough to be classified as putting them at risk, so we all qualify as healthy, which is pleasing to know! In arriving at the numbers below, I've taken an average percentage between the male and female percentages, just to make my own life a bit easier. They're not too different anyway, and it's a damned sight easier than refining it to genders for different age groups. 
 
I've therefore said 8.3% of people dying aged 70-plus have no known underlying health conditions and 11.15% of people dying below 70 have no known underlying health conditions. The total number of people who could die, who were otherwise known to be healthy, would be 67,586. Of those people, those 70-plus would account for 56,453, or 83.5%. Those below 40 would total 1,653.
 
Remembering the primary reason for my research is for mum and my daughter, I've focused on a 12-year-old healthy girl, with a smidge of asthma; a 79-year-old lady, with a smidge of COPD; and a 46-year-old healthy male:
 
My daughter
From the above data, it would suggest my daughter is pretty safe personally. I wanted to see what the wider global picture looked like too, so I had a look at Vox.com to read about mortality rates in under-20s. By 23 March, only one death of a person below 20 had been attributed to coronavirus, although there have been very isolated cases of coronavirus affecting under-20s after this date. However, the chances of my daughter falling foul to the disease would seem to be about one in a billion.
 
My mum
Well, my mum is a bit older than my daughter, and therefore at a greater risk, naturally. However, she's healthy (and, as I said, a very tough Yorkshire lady) so her chances are still pretty good, even if she does get the virus. A total of 12,883 people of my mum's group could die if every person aged 70 to 79 contracted the disease. There are about 6.5 million people in England and Wales, who are between 70 and 79. That means mum would have about a 0.198% chance of dying from coronavirus, if everyone contracted it. In my mum's words: “I can't afford to waste 12 weeks locked up at my age, I'd rather take risks and enjoy my life, thank you very much.” My mum isn't much of a gambler, but I think she'd be happy to ante up, based on those odds.
 
Me
I'm 46 (people gasp!) I'm not aware of any health conditions that I have, although people close to me may argue I've had pretty much every illness there is, or will ever be, even if only psychosomatically! If everyone contracts coronavirus, then about 1,305 people in my age group may die. According to ONS, there are about 8.5 million people aged 40 to 49, meaning my chances of dying from coronavirus, if I contract it, are about 0.0153%. I can therefore tell my daughter I'll most likely be okay too.
 
Given my primary purpose for researching and writing this article was to help my daughter and mum feel safer, I think I've gone a long way towards that for both of them. I've also made myself feel a lot better about my prospects too! There's a one in 279 chance of someone dying at my age full stop, or about 0.35%. Coronavirus has possibly moved that to about one in 265, if everyone contracts coronavirus.
 
It's a very sad reality people are going to die from this disease, and many of us will know people who have been materially impacted, so it's always tough to have a logic-based opinion in such emotive circumstances. However, it's also virtually unquantifiable to assess the enormous damage being done to our nation's mental and physical well-being, through the stress of being isolated, worrying about health and finances, and not identifying potentially life-threatening underlying conditions. The misery and death count over the coming months and years, as a result of this heartache are potentially overwhelming. 
 
The hospitality sector lives and breathes to make people's lives better. We want people to enjoy themselves and share their amazing experiences, so others can follow. If people 70-plus with existing health conditions were protected by the rest of us, by caring from a distance until a vaccine is found, almost 88% of possible coronavirus deaths could be prevented, and if all those with underlying health conditions were fully protected, 98.6% of coronavirus deaths in England and Wales could be avoided.
 
The alternative way of life that everyone is experiencing for the short and mid-term must be more damaging? Food (and drink) for thought.
Julian Ross is chief executive of Wireless Social
Wireless Social is a Propel BeatTheVirus campaign member

The delivery market post-covid-19 by Gareth Ogden

One of the industry’s greatest strengths has always been its resilience and ability to adapt in difficult times, and right now we are witnessing that more than ever. As lock-down restrictions begin to ease, but uncertainty remains, businesses are increasingly taking innovative approaches to allow them to continue to operate. 

Amidst the initial rush to furlough workers and make any sort of success of the Coronavirus Business Interruption Loan application process, an increasing focus has turned towards delivery and takeaway services. Where previously this was only a small proportion of business or where the service may never have been contemplated at all, restaurants have had to act quickly with little time to plan. Now representing 100% of total revenue, getting this right was imperative. 

Furthermore, it is not just operators who have changed; those consumers previously reluctant to embrace eat-in options from their local restaurants have been forced to trial the service while being cocooned in their homes. Of course, many may rush back to their favourite venues once reopened, but there will inevitably be a large proportion now comfortable with both the process and the experience who are converted for good. Many more facing financial hardship may view it as a more affordable treat than a restaurant visit, particularly in relation to the spend on drinks. So what are the longer-term implications for this market, which was already a burgeoning one, as we emerge from lock-down and when social distancing restrictions do finally cease?

On the face of it, it may appear the Deliveroos and UberEats of this world would be the main beneficiaries of a further boost to delivery demand. However, while volumes may indeed increase for third-party delivery companies in the immediate future, their longer-term prospects are less clear. 

Before the pandemic many operators were already battling to make delivery worthwhile. Indeed in the haysmacintyre 2019 Hospitality Index, fewer than 30% of respondents reported delivery was having a profitable impact on their business. With cost control high on the agenda for the foreseeable future for all hospitality businesses, those often prohibitive commission rates of circa 25% loom large and restaurants may collectively start to push back on fees or explore alternative options. Indeed, the implementation of a customised website or app for taking orders and regaining control over customer data and quality of delivery could be transformational for many businesses.

Self-delivery may now become a realistic option. Previously put off by insurance costs, lack of available workers and absence of a suitable ordering system, the lock-down time-out means operators have now had the opportunity to strategise. Staff, resources and unused restaurant space may become available for reallocation to the delivery operation. Kerbside pick-ups have also gained in popularity as consumers have become comfortable with the process and operators have made it more efficient. Many consumers will surely remain sensitive towards the risk of infection, and the more they get used to an effective kerbside pick-up process in lock-down, the more it becomes normal practice.

Both operators and consumers can see benefits from cutting out the middleman by way of self-delivery or customer collection – the food is hotter, fresher and often better presented on receipt. A happy customer will be a repeat customer, and of course a repeat customer makes for a happy operator. 

More generally we might expect to see operators focusing on the quality of their packaging. With consumers more open to the delivery and takeaway experience being a new normal, they may be willing to pay that little extra to ensure the dishes they receive are perfectly presented and at the optimum temperature and moisture level. 

This trend will be particularly relevant for those higher-end restaurants looking to exploit the opportunity. Fine dining operators have typically shown little or no interest in offering delivery or takeaway, but this may need to change. Consumers increasingly like quality and they certainly like delivery – these two worlds may be about to collide. During lock-down, frustrated restaurant-goers have sought to recreate the fine dining experience at home, for special occasions or otherwise, and relevant operators have begun to oblige. It is surely inevitable this should continue at some level.

One of the main attractions of ordering eat-in food for hard-up consumers is the financial benefit of reduced expenditure on drinks. Operators’ profitability from the lucrative mark-up on drinks will be compromised and creativity is required to compensate. Mix-at-home cocktails, wine-pairings and novelty craft beer are just some of the offerings that might become commonplace. Further forward, expect seasonal innovation, gift ideas and reward schemes to enhance customer loyalty too.

This pandemic has brought to the fore a renewed community spirit, and consumers particularly determined to support local ventures. Whether they want, or need, to stay at home, there are ways businesses are already changing to take advantage of this, many of which will surely endure.
Gareth Ogden is a partner at sector accountancy specialist haysmacintyre
haysmacintyre is a Propel BeatTheVirus campaign member

Insightful interviews by Ann Elliott

Mark Wingett and I (but mainly Mark) have been conducting a series of interviews with senior operators in the sector to discover their thoughts about covid-19 – pre, during and post the crisis. I have also been interviewing a number of suppliers to understand their perspective. The interviews have been insightful, interesting, and informative and there have been some common threads running through them:

– Universal acclaim for what Kate Nicholls from UKHospitality has done, and continues to do, to promote the interests of the sector to government. Her intellect and focus have been praised as well as her tenacity and determination. She understands government and the process (and patience) needed to communicate a very clear message to those who need to be persuaded to support us. 

– A recognition of the “good guys” in the sector – those that have gone above and beyond to help others by providing resource, learnings and support to those that have wanted it. There has been intense collaboration and a real desire to work together and those that “give” have been noticed.

– Surprise and delight at the support that has been given to our sector (and others), including furloughing (and the generous extension of the scheme), loans, grants, the pushback over rent and service charge payment, HM Revenue & Customs deferrals and the bounce back scheme. 

– There is a frustration from some suppliers – totally dependent on our sector – they are classed by specialism (eg technology/construction) rather than by sector, and have therefore missed out on local grants.

– A real need for clarity now from the government on reopening dates and social distancing measures – two metres versus one metre being the main one. Also, there is a desire for government consistency with its pronouncements.

– A realisation operators are on their own in terms of negotiation with specific landlords and the government is unlikely to interfere any more than it has done already. There is also a sense among many there needs to be compromise and consultation rather than conflict, but at the moment the sector is heading towards the latter with two entrenched and very different viewpoints.

– While everyone feels business will be different post-covid-19, no one really knows how this will manifest itself (and everyone hates the term – “the new normal”). They can do all they like to protect the safety of customers and teams but it’s all pointless if footfall doesn’t return. There are some positive stories (eg from France) but some equally horrendous ones. Scenario planning has been intense and relentless in response to rapidly changing events. 

– There is some concern thousands will have to be spent sorting out social distancing, which will then have to be written off when it all stops. Perspex sourcing has become a skill in itself. 

– Delivery, click-and-collect, takeaway, recipe boxes and online shops for both food and drink have helped some companies tick along but they are not seen as any sort of indicator of how business might be when reopened. Most operators say they will lose money at anything below 80% of previous business – some will stay shut until that seems very likely while others will go early to gain a market share advantage and take the loss week-on-week. 

– A lot of effort has gone into communicating creatively and consistently with teams – videos, quizzes, advice, recipes, cooking demonstrations, chats, WhatsApp groups, Yapster conversations – to keep them up to date. There has been real honesty in these communications although operators have not always been able to give clear answers to their teams because they haven’t had the answers themselves. 

– Most have kept in touch with customers though not to the same degree or level of creativity. Teams have been a first priority. 

– Operators and suppliers have been examining every single cost in minute detail across the whole of the supply chain. There is no doubt huge cost reductions are on their way, which will be particularly noticeable in headcount at every level. There is a fine line being tread between furloughing, part-time working and redundancies. 

– For some this crisis has presented the opportunity they have needed for some time to sort out their structure, headcount, property portfolio, rents, overheads and other P&L costs. 

– Pragmatism has been a key characteristic of the leaders I have interviewed. Without question most are “glass half full” type of people but this crisis has tested their optimism to the limit. They want to reopen and trade again but not at any cost. There has been a real need to think the “unthinkable” and they have been prepared to do just that.

These interviews to me have reflected some of the key attributes of people in this sector – honesty, optimism, determination, care, passion, and kindness.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com
Elliotts is a Propel BeatTheVirus campaign member

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