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Fri 9th Oct 2020 - Friday Opinion
Subjects: Seeking a roadmap out of the disruption, support must be long term and flexible, extra restrictions kill the swift pint option, eating and drinking out is safe
Authors: Gareth Ogden, James Low, Glynn Davis, Ann Elliott
 

Seeking a roadmap out of the disruption by Gareth Ogden

The past week has, once again, been a turbulent one for the sector. Reports of coronavirus spikes in the north of England and Scotland have raised the potential for a return to heightened restrictions, while businesses already balance the existing limitations. We’ve also had news from some significant industry players, some of it positive and some it of understandably less so. 
 
First came The Restaurant Group’s results, a relatively positive story from the beleaguered casual dining sector. It was interesting, albeit perhaps unsurprising, to see the different approaches the media took in reporting the news. Some led with “collapsing sales” while others were more glass-half-full, saying “encouraging trading since lock-down”. Next came a rather more unwelcome, although again not hugely surprising, announcement that Greene King is to permanently close 25 sites and cut hundreds of jobs. The tone of reporting by the media was rather more unanimous this time. 
 
While those highlighting The Restaurant Group’s losses were not wrong to do so, there were also certainly encouraging signs. Andy Hornby’s optimistic comments that the group’s actions will provide strong foundations for recovery made for welcome reading. Indeed, it has certainly executed an agile response to the crisis and is in a more streamlined position for the battles still to come. Covid has forced them to restructure operations more swiftly than they might otherwise have done in respect of the parts of the business already underperforming prior to the pandemic, such as Chiquito and Frankie & Benny’s. The crisis has also forced sharper focus on pre-existing trends, such as the growth in delivery going forward – particularly for Wagamama, where central kitchens are being considered for those areas not currently within reach. The acceleration of these adjustments may yet prove to be an unexpected upside arising from the current trauma. 
 
Equally though, such positivity should be tempered with caution. Included in the group’s results will have been a significant short-term boost from the Eat Out To Help Out scheme running through August. Then, in mid-September, the Government advice reverted back to working from home wherever possible, on top of the 10pm curfew being announced – both of which are likely to subdue momentum, particularly in city centres. 
 
Cautious or not, how can The Restaurant Group be looking optimistically to the future while Greene King is announcing extensive site closures and job losses. Which is a more realistic picture of the sector? For one, Greene King’s plight is, unfortunately, highly likely to be indicative of what is yet to come – in fact Fuller’s, Young’s and City Pub Group have all indicated that further job losses are likely. Such news will be felt most severely in city centres while government advice remains to work from home.
 
In comparing the announcements from The Restaurant Group and Greene King, it should be noted that the wet-led sector will have seen little of the cash flow boost from the Eat Out To Help Out scheme, which greatly benefited restaurants and dry-led venues. 
 
The 10pm curfew will likely also have impacted companies such as Greene King and the wider pub sector proportionally more so than their counterparts in the restaurant industry, despite wholesale agreement against the restrictions on critical late-night trading hours. Indeed, a recent open letter signed by 100 major hospitality firms won backing from MPs in calling for the curfew to be reviewed every three weeks, and scrapped completely if found to be ineffective, as it is expected to be so. And with Labour leader Sir Keir Starmer recently calling for the prime minister to publish the scientific evidence behind the 10pm curfew, there is hope the rule might be reformed without affecting the industry further. The end of the Coronavirus Job Retention Scheme, which is being replaced by an inferior alternative in the Job Support Scheme, could also not be less helpful at what is a key time for the sector.
 
It might be The Restaurant Group has found a roadmap to eke a silver lining from the disruption, and they certainly won’t be the only ones, but it remains to be seen who will be in the majority. The constant balancing act of existing restrictions and challenges, on top of the talk of additional measures on the way, would suggest it is inevitable that we will hear of further negative news – with or without the possibility for a positive spin – unless we see further significant government action. 
Gareth Ogden is a partner at haysmacintyre 
haysmacintyre is a Propel BeatTheVirus campaign member
 

Support must be long term and flexible by James Low

We are the UK’s largest operator of fish and chip restaurants through our two brands – Deep Blue and Harry Ramsden. In September, our like-for-like sales were 98.5% of 2019 levels but we are already feeling the effects of the government’s latest restrictions that have been imposed on the sector.
 
We were delighted with the speed at which our business has recovered since the lock-down restrictions were eased. Our investment in training and other measures that were designed to ensure social distancing guidelines were observed paid dividends, resulting in a highly encouraging performance in August and September, which gave us justifiable cause for optimism. 
 
However, since the government announced its new measures to tackle the covid-19 virus, our sales have fallen by 20% on the previous year. While these new measures should not, theoretically, affect us at all (a large number of our restaurants are takeaways and our restaurants have very few customers at 10pm), the government has created a second wave of fear in the public mindset and the impact of it is clear to see. 
 
The impact to the broader hospitality industry, particularly those operating in our major cities, is likely to be catastrophic. The 10pm curfew is a mistake and needs to be rethought. Surely the government believes the people at whom the curfew is aimed (mainly young people) will quietly go home at 10pm. They will not, they will congregate in large numbers in other areas or go to each other’s houses or flats and continue to socialise. The government is taking them from a managed environment that observes social distancing measures to one that does not at a time when Public Health England data shows fewer than 5% of new incidents of covid-19 were linked to food outlet or restaurants settings. It clearly makes little sense.
 
It must be said the government’s supportive measures since lock-down was imposed have been invaluable. The various schemes, such as the Coronavirus Job Retention Scheme and the Eat Out To Help Out Scheme were innovative and the efficiency with which claims under the schemes were paid was impressive, so one must give credit where credit is due. However, there must be a realisation on the part of the government the hospitality landscape has changed, and long-term measures must be put in place that will allow the hospitality industry to survive, prosper and continue to be the large-scale employer and contributor to the economy that it is today. 
 
One of these measures should be a permanent reduction in VAT. Such a measure, if announced early, would allow businesses to plan for survival and investment. Without such long-term measures the hospitality sector could be devastated, leading to failed businesses no longer generating tax receipts and mass unemployment. A devastated hospitality sector, particularly in our major cities, would also have a hugely negative impact on commercial property, which could affect pensions, for example, and the list of the consequences goes on.
 
Long-term supportive measures for the hospitality sector need to be agreed and announced as early as possible allowing businesses to plan for the future. 
James Low is founder and chief executive of Deep Blue Restaurants
 

Extra restrictions kill the swift pint option by Glynn Davis

Many times over the past couple of weeks at the end of the day I’ve thought about popping out to the pub for a quick pint while I read the paper. But I’ve then changed my mind and instead cracked open a can of beer or poured a glass of wine at home.
 
Once lock-down ended, I reckon I was more excited than the majority of people at the ability to again simply go for a drink in a convivial atmosphere that wasn’t my own garden or house.
 
But what has transpired has not been particularly appealing because of the growing number of steps you have to go through before you get to the point of having a glass in your hand. When I first ventured out to my local pub, table service was being strictly enforced and the advice was to book ahead. Wandering in randomly was OK at quieter times but problematic at other periods. 
 
I took the option to instead frequent a pub a little further away because the radicals down there allowed orders to be made at the bar – with social distancing in place. This enabled a brief bit of banter with the person serving. I’d then have to take a seat but at least it seemed closer to the old pub experience. 
 
This sadly came to an end when table service was enforced nationally. The result of this change became all too apparent when I found myself, one early evening, in Kentish Town. Even at the largest of pubs there were (albeit modest) queues while people waited to be allocated tables and fiddled around with their phones scanning QR codes. Once seated, the orders then have to be taken and the wait begins for the beer. If you are only intending to pop in briefly then already the appeal has completely gone out the window.
 
Yes, I might be impatient, and yes I know table service is par for the course in many other countries. But I’d argue they are very much geared up to this in terms of service and also their customers are used to this method of operation. Also the economic model has been built around it. At my local pub, sales levels had rather healthily increased by 50% quickly after lock-down but I understand staff numbers had doubled in order to deal with the extra effort of table service. This suggests a lot more work for the same levels of profitability.
 
But when you then throw in the 10pm curfew, the situation becomes dire for businesses and customers. After its introduction, like-for-like sales fell 21.2% compared with the week before it was brought in. With this, food fell 19.1% while drinks declined 23.2%, according to S4labour. 
 
I’m clearly not alone in finding the creep of extra restrictions limiting the appetite for socialising. According to a CGA Consumer Pulse Survey conducted on 22 September, two in five (40%) of people stated they would go out less often as a result of the measures. This compares with a much more modest 14% who intend to go out more often.
 
This chimes with the findings of early surveys where the most successful venues were those that managed to successfully balance the provision of safety procedures with the retention of elements of normality. This was the case with intelligent operators such as Hawksmoor, Corbin & King and D&D.
 
At the time of Eat Out To Help Out, Des Gunewardena, chief executive of D&D, stated: “Our restaurants have all followed covid-19 safety guidelines provided by the government, industry bodies and safety consultants, and our customers have given us unequivocally positive feedback they feel safe in our venues and our procedures are not detrimental to their dining experience.”
 
With the extra restrictions that have since been imposed, things have changed. The experience of going out is becoming increasingly affected and D&D like every other hospitality company will be feeling the painful impact. Despite my own strong desire to socialise and support the hospitality industry the once simple act of going out – especially the off-the-cuff variety – has rather sadly become anything but a straightforward exercise.
Glynn Davis is a leading commentator on retail trends
 

Eating and drinking out is safe by Ann Elliott

Drake and Morgan’s The Folly, The Ivy in Birmingham, The Peacock Farm pub in Bracknell, the Charlotte Street Hotel, The Ned, The Angel and Blue Pig in Lymington, The Pointer in Brill, The German Gymnasium, Caravan in King’s Cross, Dishoom, The Wavendon Arms in Milton Keynes, The Plough in Southampton, Pat Val in Piccadilly and Woodworks Trading in Thame – all visited in the past two weeks and all, from a customer perspective, full.
 
Of course much of this perception of “busyness” was due to the fact that 20% to 30% of tables had been removed, screens had been installed, space had been cleared and closing time had been moved forward. Not great for an operator but from a customer perspective, the experience hadn’t suffered, in fact, it was often better than before the crisis.
 
In most, but not all, we had to: book ahead, check in to track and trace via the NHS app, wear masks when not sat at a table, sanitise our hands and have our temperature checked prior to entry, take note of a one-way system, order from a QR code menu, have table service and pay with a credit card. Oh, and wait outside the loos not knowing how many people were already in there (usually none). Caravan was particularly thorough. 
 
I am now used to this. Apart from the fact that the welcome, in many places, felt more like a health and safety briefing than the start of a great experience, it was OK. I understand why this all has to happen. I like to be able to see the smiling faces of waiters/waitresses so I really feel for them having to wear masks through each session (and I am not comparing their experience to that of nurses and doctors).
 
I avoid crowded, enclosed spaces with close contact with others as much as I possibly can. I try to avoid “super spreaders” because meeting up with them doesn’t seem like a good idea. I wash and sanitise my hands regularly, wear a mask when I have to and try to resist hugging people (that’s the hardest part). I have not piled out of a pub and gone partying at 10pm. In other words, I am like most other people I know and meet. 
 
I have to say, I felt safe in every one of the 26 pubs, bars, cafes and restaurants (all in the south, I have to admit) I have visited in the past two weeks. Every operator has taken government guidelines very seriously and has appeared totally committed to the safety of both their guests and teams. They have acted responsibly and, in turn, their guests have done so too. 
 
So the thought, as a customer, of further lock-down restrictions fills me with horror. I don’t take covid lightly nor indeed dismiss, out of hand, the tragedy it has caused for many families. I don’t honestly believe though (but I am not a scientist I hasten to add) that eating and drinking out the way that I do, is causing the virus to spread. Nothing I have read or watched has convinced me, or thousands of fellow diners patently, that this is the case. In week 39, Public Health England published figures that stated only 3% of traceable infections outside of the home were from restaurants/food outlets, suggesting we are correct.
 
In support of this thinking, thousands of doctors and scientists (3,621 medical and public health scientists and 5,919 medical practitioners) from across the world have signed a letter known as the “Great Barrington Declaration”, which is the brainchild of three leading epidemiologists from Oxford, Harvard and Stanford universities.
 
It argues for a new tactic of “focused protection”. The elderly and vulnerable would be protected while the rest of society returned to normal life to build up herd immunity. The letter points out that “vulnerability to death from covid-19 is more than a thousand-fold higher in the old and infirm than the young” and that “for children it is less dangerous than many other harms, including influenza”.
 
It declares current policies are “producing devastating effects on public health”. These include “lower childhood vaccination rates, worsening cardiovascular disease outcomes, fewer cancer screenings and deteriorating mental health – leading to greater excess mortality in years to come, with the working class and younger members of society carrying the heaviest burden”.
 
Henry Ford is quoted as saying: “If you always do what you’ve always done, you’ll always get what you’ve always got.” It’s a business mantra but one that seems to be ignored by the government who seem intent on continuing to do what they have done since March despite the fact that it doesn’t seem to be working. 
 
I don’t want to stop eating (or drinking) out – it’s my joy and my passion. I don’t want people to die of covid either. Am I being completely naive in thinking that there has to be a way of achieving both objectives?
Ann Elliott is a hospitality strategist, connector and adviser

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