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Morning Briefing for pub, restaurant and food wervice operators
Fri 27th Sep 2024 - Friday Opinion
Subjects: The changing face of wet-led pubs, why hospitality must prioritise allergen management, ops manager labour process, unlocking the potential of restaurant brands in delivery
Authors: Glynn Davis, Frankie Douglas, Alastair Scott, Tom Gatz

The changing face of wet-led pubs by Glynn Davis

Reports of the death of the traditional drinking pub have been greatly exaggerated, judging by the levels of trading across the category that shows a relatively healthy trend, as drinkers are increasingly choosing the pub rather than late-night venues including nightclubs and bars.
 
Wet-led pubs have enjoyed a 10% increase in like-for-like sales on a year-on-year basis, according to CGA, which has helped them almost match inflation since 2019 – something of a notable achievement. In contrast, it has been a bit of an ongoing bloodbath for the late-night category, with CGA revealing that 49% of operators have experienced a decline in footfall as people switch to drinking in pubs – especially Generation Z drinkers, who are the mainstay of late-night activity. 
 
Between 2022 and 2024, the percentage of the Generation Z cohort frequenting drinking pubs for their “high-tempo occasions” (whatever they are) has increased from 13% to 17%, while for nightclubs, it has fallen from 32% to 27%, and bars have retreated from 27% to 23%. 
 
Undoubtedly, a chunk of them have been tempted into the growing category of theme bars, which seek to offer more than just another drink in non-differentiated surroundings. Such things are hardly new and have appeared intermittently over the years. We’ve had the Eerie Pub Company, the Frankenstein bars in Scotland, and some of the weaker Irish bars also fall into the theme category.
 
More recently, we have Inception Group’s growing chain of Mr Fogg’s bars and its new theme, Cahoots, which includes the Ticket Hall Boozer, and which will soon be joined by the Postal Office. As its nightclubs come under pressure, Rekom has also announced two new themed concepts – Bonnie Rogue’s Pub and Barbara’s Bier Haus.
 
Some of these will undoubtedly fall into the flavour of the month, or year, or some other timeframe as they ultimately fall out of favour with their target audience. Having a defined target customer differentiates these concepts from the traditional wet-led pub that favours an all-welcome policy. 
 
This is, without doubt, their overarching beauty, and Oisin Rogers, of The Devonshire, speaking at the recent Casual Dining Show, very much agreed: “Good pubs have a massive mix of people…and should be inclusive of race, religion, age and [welcome] all elements of the population. Really classic old pubs will be more embracing. They target everybody.”
 
He says the pub companies – including Stonegate, Mitchells & Butlers, Young’s and Fuller’s – build their pubs around the idea of their best customer, and this can be a mistake as they then run the risk of shutting out a potential broader audience. Even the mighty JD Wetherspoon is cited by Rogers as effectively only aiming to appeal to a specific section of the community – the value-conscious drinker that skews to the older end of the age range and is likely to be male. Maybe it should expand out beyond this established customer base, he suggested when we chatted at the show.
 
It might just be doing that, judging by its recent openings. The Lion & Unicorn has just opened at Waterloo station and greets customers with the wording “bar and restaurant” emblazoned on its sheet glass exterior. It has attracted a very different audience to the more established Wetherspoon pubs and draws in a broad crowd more akin to that seen at its other newer outlets, including The Captain Flinders near Euston station and The Barrel Vault at St Pancras.
 
Clearly, these are all train station pubs that reflect the great diversity of the travelling public, but there are undoubtedly some elements that Wetherspoon can take from these units and incorporate into future openings, and also drip-feed elements into its existing estate. Such moves will also mitigate against the risk of the business, operating on a burning platform of an ageing customer base.
 
Such accusations have been thrown at wet-led pubs as they have perennially been linked to old men’s boozers, but there are a growing number of examples of pubs that have moved on from this outdated thinking. In one camp, there are the unchanged venues whose traditional welcome-all philosophy has been embraced by a younger audience that recognises them as comforting, inclusive and, equally important, cool nowadays.
 
In the other camp, we have the ongoing wave of unloved pubs such as the Pelican and The Hero in west London, which have been stripped back to their Victorian architectural bones and injected with a vibrancy by their youngish new owners. 
 
Across these two camps, we have a growing number of drinkers realising that the wet-led pub (yes, some also do food) can offer the sense of ownership, community and diversity that late-night drinking bars, nightclubs and themed venues ultimately fail to deliver.
Glynn Davis is a leading commentator on retail trends

Why hospitality must prioritise allergen management by Frankie Douglas 

As the mother of a daughter with a diagnosed food allergy, I know all too well the challenges and fears that come with eating out. After all, food allergens are a matter of life and death, and getting it wrong can have tragic consequences.  
 
When Natasha’s Law was introduced more than three years ago, I was encouraged to see the industry sit up and act. Through mandated ingredient declaration, we have seen significant improvements made to food information transparency across the grab-and-go market, empowering consumers to be able to make safer food choices.
 
But food allergens don’t just impact this slice of the market, it’s an industry wide issue – as most recently seen through the tragic deaths of Hannah Jacobs and Owen Carey, who lost their lives as a result of poor allergy management and labelling in the out of home (OOH) sector.
 
Both these cases represent a profound need for stronger allergen management and communication in OOH establishments, something that is likely to become a reality as the campaign around Owen’s Law, which calls for mandated written allergen information (such as on menus) and better and more in-depth staff training, continues to gain traction.
 
Some operators are starting to put allergy management front and centre, implementing tech-driven solutions to support in the delivery of this. However, others are slower to this opportunity so far. There is real value in investing in allergy management, and until the rest of the sector catches up, those who do cater to food allergies are seizing a competitive advantage.
 
Some 2.4 million people in the UK are officially diagnosed with a food allergy, and research suggests that 63% of young consumers with allergies avoid dining out due to a lack of confidence in allergen management processes. So, why act now, and what is the benefit of investing in allergen management and creating an environment where all guests are able to eat safely and confidently? Here are a few factors.
 
Supercharged allergy management drives loyalty and footfall
With consumers becoming more conscious of what they eat, transparency on what is in food products is vital. Operators who put accurate and robust allergen information right at guests’ fingertips ensure they minimise the risk of customers becoming unwell or having a stressful dining experience. Creating a safe and reliable environment, where customers feel confident that their dietary needs are understood and met, builds trust and customer loyalty and repeat footfall. 
 
Boosts reputation and ensures long-term success   
The rising prevalence of food allergies and the potential life-threatening consequences of exposure demand a proactive approach to ensure customer safety. Doing the bare minimum in allergen control can not only lead to serious health risks for guests, but can also harm a restaurant’s reputation, affecting business success. 
 
Digital menu systems are an instant solution to creating a more inclusive, safer dining environment, and opting for a platform that seamlessly integrates with your current tech stack can also help save you time and money. However, to boost brand reputation and minimise allergen risk further, it’s equally important that this is coupled with other protocols, such as regular staff training and clear labelling. 
 
Improves operational efficiency through real-time supply chain management
A digital supplier management system enables both single and multi-site operators to react swiftly to product substitutions or supply chain disruptions. It supports the transfer of real-time food and nutritional data, enabling operators to accurately adjust menus and update ingredient information.
 
In so doing, they can confidently deliver an exceptional customer experience in that they are informed and protected from any potential allergen risks. Keeping abreast of the latest allergen information, developing allergy-friendly menu options and training staff accordingly and regularly delivers competitive advantage and relevance in an ever-changing market.
 
Final thoughts
Allergen management is simply no longer a choice, but a critical responsibility we must fully embrace. As new laws inevitably come into place, it’s time to elevate allergen management from a compliance requirement to a core value that drives long-term success. Now is the time to take a step back, review and refine processes and ensure allergen safety is a top priority.
 
By prioritising the safety of customers and investing in effective tech-driven strategies, hospitality businesses build trust, enhance their reputation and create a welcoming environment. After all, this is what hospitality is about, and we have a responsibility to make sure it’s a safe place for everyone to enjoy. 
Frankie Douglas is head of regulatory affairs at foodservice technology provider Nutritics
 

Ops manager labour process by Alastair Scott

One of the most frequent questions I get asked is, if you are an operations manager, how do you organise yourself to deliver on labour in the most effective way, and in the least amount of time? The flippant answer is that it depends on a number of factors like the manager, the objective and the operations manager themselves. But answering the question in this way is not entirely useful, so I am going to try and set out a few guidelines that will help to deliver this.
 
1. Setting objectives for teams is essential, but they must be clearly defined so that progress can be measured weekly. In the past, this was often tied to labour percentage targets. Today, it is more likely to involve aligning with deployment goals that meet corporate objectives, or even hitting specific cash targets. Surprisingly, many large businesses still prefer managing at the cash level, despite having advanced deployment systems. While assigning objectives is common practice, the real challenge lies in achieving them.
 
2. Establishing templates for business thresholds is more effective than relying on weekly sign-offs. While you might expect weekly sign-offs to be necessary, they demand excessive effort to make work and encourage sites to see if they can get away with it. This either results in a time-consuming overhaul or a repetitive process that drains resources. Managing 15 sites could easily turn into a full day’s work. Instead, I recommend agreeing on templates for sales thresholds. Well-designed templates streamline the process and can be quickly adjusted, saving time. 
 
3. Schedule a weekly visit to adjust, refine and discuss operations. This may seem like a big commitment, but it ensures each site has a deep conversation about labour roughly four times a year – a small investment given its impact on cost, service and sales. The challenge comes if this process slips. Without regular review, template rotas become outdated, get ignored and new, unapproved rotas will surface. If you are not careful, you will end up reverting to the process of weekly sign-off, which is time-consuming and destructive. 
 
4. What does an effective process look like? It involves several stages, varying in length based on time and the quality of the team. Nailing these stages and embedding them into your business as best practice will really make a difference to how you deliver on labour.
 
Stage 1 – tasks: First, identify all tasks within the business, categorise them and determine whether they are fixed or slack. It is crucial to coach new assistant managers and managers on this properly so that slack tasks do not become fixed and fixed tasks do not get moved to pre or post-opening times.
 
Stage 2 – management rota: Creating a solid management rota is key to ensuring proper leadership without overstaffing on slower days. By carefully structuring the rota, you can maintain a balanced and efficient operation. 
 
Stage 3 – deployment: Matching supply and demand is essential. A rota must be designed to align with these needs while delivering excellent service throughout the week. Keeping in mind that the worst service often occurs when you are the most overstaffed, the key is finding the right balance to ensure efficiency without sacrificing service quality.
 
Stage 4 – shift planning and leadership: This is the most crucial step. By agreeing a shift plan, you focus on the essential tasks and the necessary structures to ensure the leadership team is actively managing the business. It is about organising operations to be guest-focused and effective. This level of detail is vital for maintaining a well-run, efficient operation, both on busy days and during slower times. 
 
Stage 5 – kitchens: Kitchens have always been the major source of overspend in our industry. Too often, we have sacrificed front-of-house teams to add more staff in the kitchen. Kitchens alone, with their challenges of line structuring, prep and pot washing, require immense attention. In fact, effectively managing a kitchen could easily take a full day or more. But the rewards for getting it right – both in terms of cost control and operational efficiency – are substantial. 
 
Maintaining these steps may seem challenging, but they are a crucial part of running a successful business in today’s high-labour-cost environment. By implementing these guidelines, you can create a more efficient operation that not only controls labour costs, but also delivers great service across the board. It is all about putting the right systems in place to get your teams and your business set up for success.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns

Unlocking the potential of restaurant brands in delivery by Tom Gatz

The advent of artificial intelligence (AI) and the maturity of food delivery opened up a huge growth opportunity for established restaurant brands. It is now possible to reach millions of new customers they could never reach before. Virtual brands (food brands that exist solely for delivery or takeout, without a physical dine-in location) have started to leverage this opportunity and to inundate delivery apps. 
 
However, consumers don’t like them. As a matter of fact, Uber Eats has recently shut down thousands of virtual brands on its platform. Established restaurant brands are loved by customers across the UK, and most of them have not yet seized the opportunity to go and serve these customers, missing out on billions of potential delivery sales. Bold first movers have seen tremendous results, adding £10m-plus sales within months.
 
The challenge: limited growth opportunities and lack of control
Growing a restaurant brand while maintaining brand consistency and reputation is tough. Doing so organically provides a deep sense of control over the brand, but requires an enormous amount of time and resource to deploy, from heavy capital investments to the sizable liabilities that come with operating traditional restaurants directly. In turn, ambitious restaurant brands typically grow with a traditional franchising model: partnering up with a number of franchisees or one master franchisor, who will take on the capital investment and liabilities that come with opening new bricks-and-mortar sites.
 
However, with a traditional franchising model, expansion is often confined to the most densely populated urban areas. While these markets can be lucrative, they represent only a fraction of the potential customer base. In addition, managing a network of franchisees to ensure that the brand’s standard operating procedures are enforced requires significant effort and diligence. Although the brand typically has strong contractual rights to control its destiny, in reality, it heavily relies on the ability of franchisees to execute at the right standards.
 
The opportunity: the advent of AI and the maturity of food delivery
There’s good news. The maturity of food delivery services has unlocked enormous growth opportunities. Until very recently, food delivery services were only present in large cities. Food delivery platforms are now present in the vast majority of small and mid-sized towns, providing infrastructure that can be leveraged by restaurant brands.
 
These small and mid-sized cities are vastly under-served. People in these areas are craving more exciting options, yet these areas often lack the demand to justify traditional models like dedicated bricks-and-mortar sites or dark kitchens. This is a multibillion-pound opportunity for established restaurant brands.
 
In addition, AI, built and deployed well, ensures low defect rates and consistent levels of quality across a wide network of operators, even during busy periods. It can also support maximising sales and profits by determining the most efficient pricing and marketing campaigns to run in a given location for a given brand.
 
The solution – licensing your restaurant brand to be cooked out of high-quality host kitchens
First movers are seizing this opportunity by partnering with high quality commercial kitchen operators such as pubs or hotels to cook their brands on delivery only, alongside their existing operations. This bypasses the need for restaurants to set up their own dedicated sites, allowing them to bring their high quality food to millions of previously under-served customers in a lower cost, lower-risk way. 
 
To ensure standards and operational KPIs are kept on par with the restaurant’s directly operated locations, restaurants are leveraging AI technology and clear tools and processes to monitor and maintain quality and brand consistency.
 
We are on the brink of a revolution in the way people eat. Food delivery volumes still only represent a tiny fraction of food consumption because it’s still too expensive for the value it provides. As we’re able to increase value by bringing great brands to more areas and drive lower prices through technology and supply chain aggregation, we will accelerate that adoption of food delivery.
Tom Gatz is co-founder of virtual kitchen company Growth Kitchen

 
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