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Morning Briefing for pub, restaurant and food wervice operators

Fri 9th Feb 2024 - Friday Opinion
Subjects: Pouring energy into what matters, grabbing an ever bigger chunk of the market, what is the right differential for minimum wage between ages 
Authors: Ann Elliott, Glynn Davis, Alastair Scott

Pouring energy into what matters by Ann Elliott

There are usually two reactions when I tell people I have just been on a yoga retreat for ten days in Goa. It’s either: “How wonderful. Are you feeling all Zen now?” Or: “Oh my God, I couldn’t imagine anything more boring.” Well, it’s not boring, unless swimming, shopping, reading, laughing, eating and exercising are just not your thing.



And any Zen-like qualities I might have had at the end of the week were quickly dissipated by the flight back on Air India. “Unreasonable Hospitality” by Will Guidara would be a wonderful place for the business to start its own journey of self-development and enlightenment.

Or perhaps the management could just watch a video of the two of us struggling – one with a screen but no working handset and one with no screen but a working handset – on the ten hour and 20-minute flight out. Maybe then it can get someone to do something about it for the return journey ten days later. Oh, and then there’s the toilets. Anyhow, I digress – back to the positive memories.



While being able to practice yoga for four to five hours a day and sort out all those niggling little pains, improve balance and feel truly well was amazing. There were so many benefits to having the space, quiet and guidance to reflect. The session on “pranamaya kosha” – the vital energy, breath or life force, resonated the most with me. In Sanskrit, the word “prana” refers to life force and is the word for breath. “Awareness of this kosha allows for the movement of stagnant energy to experience greater vitality and an energetic connection to yourself, others and nature.” Who wouldn’t want that?



In real life, and particularly in our sector, we have so many demands on our time, our head space and our energy. None of these are elastic. We only have so much time and so much energy. They are precious resources not to be squandered lightly and unwisely. Yet we do. We work late, hard and furiously, handing over our limited energy to others, leaving ourselves depleted, knackered and depressed.



These words from Anthony Hopkins, the actor, shared on the retreat, really brought this sentiment alive. “Let go of the people who are not prepared to love you. This is the hardest thing you will have to do in your life, and it will also be the most important thing.



“Stop having hard conversations with people who don’t want change. Stop showing up for people who have no interest in your presence. I know your instinct is to do everything to earn the appreciation of those around you, but it’s a boost that steals your time, energy, mental and physical health. If you are excluded, insulted, forgotten or ignored by the people you give your time to, you don’t do yourself a favour by continuing to offer your energy and your life. The truth is that you are not for everyone, and not everyone is for you.



“The most valuable thing you have in your life is your time and energy, and both are limited. When you give your time and energy, it will define your existence. When you realise this, you begin to understand why you are so anxious when you spend time with people, in activities, places or situations that don’t suit you and shouldn’t be around you, your energy is stolen. You will begin to realise that the most important thing you can do for yourself, and for everyone around you, is to protect your energy more fiercely than anything else.

“Make your life a safe haven, in which only ‘compatible’ people are allowed. Decide that you deserve true friendship, commitment, true and complete love with healthy and prosperous people. Then wait and see how much everything begins to change. Don’t waste time with people who are not worth it. Change will give you the love, the esteem, the happiness and the protection you deserve.”



With that in mind, our teacher gave us one important question to answer: “What would happen if you poured your energy into the places and people that mattered most to you?” You don’t need to go to a yoga retreat to think about that – but it helps.
Ann Elliott (she/her) is a portfolio non-executive director and board advisor

Grabbing an ever bigger chunk of the market by Glynn Davis

Asda is adding 110 more convenience stores this month alone, which will enable it to make further inroads into the grab-and-go food category, and it is not alone as all the major supermarkets, and symbol groups like Spar, are experimenting with their food-to-go models.
 
They recognise we are now in an era that is much more powered by grab-and-go and delivery-only propositions. This poses a big question for foodservice operators, and most notably the casual dining brands – should they simply abandon their established strategies of opening more dining rooms and consider downsizing their exposure to bricks and mortar?
 
Clearly, the halcyon days of high streets up and down the country filled with myriad casual dining brands are sadly well and truly over, and operators across the board are coming to terms with the new world order of high levels of demand for delivery and take-out. Throw in a plethora of onerous costs now involved with operating sizeable bricks and mortar properties and they have to wonder what to do with their dine-in premises.
 
The trend away from the old dine-in model is evident in the US, where Chipotle founder Steve Ells is developing an automated takeaway-only brand, Kernel, as he cites the fact there has been a steady decline in visits to waiter-service restaurants since 2006. From late 2022, Ells says only 15% of all the visitors to counter-service venues revealed they had chosen to dine in during the previous year. 
 
Even the inventor of the “third place”, Starbucks, is rowing back on the idea of places for people to lounge around over a latte and panini. It recently announced the closure of 400 stores to make way for a strategy focusing instead on Express format stores. These pick-up only units currently represent only a tiny percentage of total group sales, but the company plans to add many more of them to alleviate the pressure it faces from the high levels of collection and delivery at its traditional stores. By 2025, Starbucks hopes to serve 40% of its delivery orders through mobile pick-up and Express stores.
 
In the UK, the shift away from dine-in is well underway. Prezzo has reduced its estate from 300 branches to around 90 on the back of the lethal cocktail of business rates, inflation, national minimum wage and food inflation. When this is combined with the dramatic ongoing reductions in footfalls on high streets, it has killed the prospect of viable sites in many smaller, rural towns.
 
Prezzo is instead joining a growing number of players increasingly focusing their attention on the grab-and-go market. Its move in this area involves opening a chain of takeaway pasta shops in train stations where it knows for sure it will get the footfall it requires and reduce its operating costs.
 
Fast-expanding franchise chain Heavenly Desserts is to open its first kiosk-style unit in Scotland, which it has named Pico, and there is there great excitement that this represents a new opportunity for the brand to open these smaller units that require significantly less operating costs and serve the grab-and-go market. 
 
The flexibility of this format is evident in the recent opening of a new-style kiosk by Snowfox Group within a Tesco store in Manchester. Although the operator of the YO!, Panku and Taiko brands already operates many kiosks in the supermarket’s larger stores, this new format, called Good Eats, is designed to fit into smaller Tesco Express and Metro stores. Although operating from a small footprint, it can provide a breakfast, lunch and dinner offer. 
 
Meanwhile, even those supermarkets without convenience outlets, such as Waitrose, are refreshing their grab-and-go offers. For the major grocers, this sort of activity comfortably sits alongside their core offerings, but for the casual brands on the high street, is does pose tough questions about their models. What role do their physical dining rooms play in today’s hospitality environment, which is still feeling the tremors of the pandemic that brought about some serious behavioural shifts, of which many now look set to stay. 
Glynn Davis is a leading commentator on retail trends

What is the right differential for minimum wage between ages by Alastair Scott

The planned increase to minimum wage has made a substantial change to the differentials between young people. From April, over-21s will see a minimum wage of £11.44, while under-18s will receive £6.40.
 
There is a solid argument against paying under-18s only 55% of the new minimum wage for adults. Many of them are better than that, which poses the question – is this age discrimination at a government level? Here in lies the rub. While a lot of under-18s deserve a higher rate, there is often a high chance that as employees, they will not work out for the following reasons.
 
For many under-18s, working in hospitality will be their first real job. We must teach them the basic disciplines of work: turning up, preferably on-time; looking smart every day; smiling, and not just to friends; going to work with a hangover and not hiding in corners; being polite to colleagues; talking to old people; working as a team; accepting proper discipline; listening to instructions and not repeating the same mistake – the list goes on. 
 
A number of young people fail on many of these measures, and some, sadly, fail on all. The churn of under-18s is, therefore, considerably higher than for those on their second, or probably third, job. The training to help them through some of these barriers is also considerably higher.
 
The hospitality industry has always been a good training ground for the rest of British industry, teaching the skills that mean those people are better able to hold down and excel at jobs in the future. A job working in a pub means that person has already developed a work ethic, which is a positive sign on a CV.
 
The real risk is that if this differential gets eroded, the cost of employing experienced hands may seem more appealing, and so the incentive to employ these first jobbers starts to disappear. 
 
But what is the right number? The argument we should accept is not a theoretical one, but a practical one. Are these young people getting the chance to start work? The answer is no! 
 
Less than 5% of the 25-plus age group are unemployed, whereas after a brief dip to under 10%, the unemployment rate for under-24s is now climbing sharply and currently sits at 12.7%. Anything over 15%, and I suspect the government will feel grave concern, but it looks like we are heading that way pretty fast.
 
Having read the summary of the low pay commission report, it looks to me as though it takes a massive amount of time to pull together, which means it is likely it will not have reacted enough to the stats, which changed sharply between April and July last year.
 
To layer on further challenges, we also pay our teams tips. Where these tips are through a company, hopefully the low pay commission has taken them into account. But, where they are not, they will not be in the report. This means that young people are certainly earning more than the government are recording.
 
My hope in all of this is that wage rates for young people are set at a point. As an industry, we want to employ young people and continue our vital role in helping them start their careers. I am proud of those who have grown through my own pubs – having watched some join as teenagers, gone through a successful university career and ended up with great jobs. I would really like that to continue.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns

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