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Morning Briefing for pub, restaurant and food wervice operators

Fri 9th Feb 2018 - Friday Opinion
Subjects: Innovation stifled, jury’s out on flights of fancy and straight statistics matter 
Authors: James Hacon, Glynn Davis and Paul Chase

Innovation stifled by James Hacon

We all know technology is a key component to operating a successful venue. With a tough market, multi-site operators are increasingly turning to technology, seeing it as a way of creating efficiencies, attracting new customers and enhancing the customer journey.
The number of systems and technologies to run even a modest multi-site operation can be overwhelming to say the least – even without much by way of innovation, the number can run into the dozens. Start adding in new and more innovative technologies and the whole thing can become a nightmare, particularly when they’re not connected. Connectivity or interfacing is of course the crunch point of any technology meeting.
We have few large-scale technology providers in our sector, some play nicely together, many don’t. For smaller, more agile players entering the market it’s almost impossible. This is stifling our innovation as a sector. Sure, technology development is costly but in many cases these big players hold us to ransom with our own data, refusing to interface with other technology providers with the same few excuses, but most commonly with the undertone of competitive advantage, wanting to maintain a monopoly – somehow believing they are the answer to all our requirements as a business. This can be as explicit as simply refusing the connection or masking it with ridiculously high integration fees. In a recent conversation with one leader at a large operator, they were being quoted tens of thousands of pounds for such work.
I could recite dozens of examples of the technology issues I’ve experienced in my career. Here are just a few. A large back-of-house provider refusing to interface to our employee app, resulting in a poorer experience for the team it was meant to benefit. A till provider unwilling to interface with a startup order-at-table solution because it had a competitive product 12 months away in its pipeline. The same EPOS provider quoting ridiculous sums to interface with a feedback provider as it has a competing product. The fact it saw it as competing certainly suggested an inability to understand the constraints of its own products.
While I’m not saying the big technology providers can’t innovate, it is well known pure innovation is often driven by smaller players with less to lose, who can take more risk and get closer to a problem. Go to any technology incubator and you'll find passionate entrepreneurs who have recognised a new opportunity and focused on overcoming a problem for their clients. I’ve met many such people in my time in hospitality – many are ex-operations staff members from their time as a student, turned coders or entrepreneurs – who know the issues first hand. The fresh thinking sees things the incumbent players often don't, not to mention the benefits of using the latest technologies rather than legacy systems. Look at the world’s largest technology companies and they are regularly acquiring and investing in smaller startups to capture the technology for integration into their system.
I wholeheartedly believe for us to achieve success and drive technology-based innovation in our sector we need our first adopters to be able to make use of large established technologies and smaller, startup technologies. To do this, we need our large technology providers to loosen the grip they’ve got on our sector, before they choke it. Some aspects of systems will compete, but you can’t be the best at everything. In my experience I’ve found some of the more innovative smaller platforms take more care on user interface and usability of their technology.
It’s time to push these players to open up their APIs. It’s unlikely this is going to happen overnight, but it is possible. It is time the biggest operators with the biggest sway push hard against their providers to achieve this result. If we work as a sector to achieve this it will benefit us all. 
James Hacon is managing director of THINK Hospitality, which invests in concepts with a bright future and advises multi-site brands on growth strategy.

Jury’s out on flights of fancy by Glynn Davis

City Darts used to be an unusual venue just off Brick Lane in London’s East End. It was a typical pub in all ways except for it having a large number of dartboards scattered around the room. This unique feature made it worth a visit for any group looking for something different to just sitting in a boozer chatting and drinking.
Nowadays this is pretty tame stuff as we are caught up in a craze of drinking (and eating) venues that include the likes of high-tech crazy golf courses, smart ping-pong tables, and the next generation of darts venues that use the latest technology to improve the game-play and interactivity to a level that City Darts could have only dreamed of.
Even the names of the companies building these venues signal we are in a different world from old-school entertainment: Swingers crazy golf is run by the Institute of Competitive Socialising (ICS) while the Bounce, Flight Club and Puttshack venues are operated by Social Entertainment Ventures (SEV).
The reality is consumers today need something to occupy them when they go out on an evening beyond merely chat and alcohol. But as interesting as these entertainments sound it is still the food and drink – mainly the latter – that are the key drivers of revenues at such establishments. The founders of ICS admit the activity part of their business is “incidental” as the real core of the business is food and drink.
These venues seem focused on a generation that demands full-on Instagram-friendly experiences whenever they venture out. The art of conversation in its traditional – rather pedestrian sense we could say – is not necessarily the crux of the exercise. Is this the early stages of a long-term shift in the dynamic of socialising that suggests establishments without additional features beyond the core food and beverage offer have a finite lifespan? Or are these places something that will prove to be of their time?
Certainly companies such as ICS refute any suggestions that what they are offering is simply part of a fad catering for what are the first of the digital natives. Its Swingers golf has certainly been a roaring success since it initially opened as a pop-up in September 2014 and the talk has been it was to open a 20,000 square foot unit carved out of the former BHS store in London’s Oxford Street.
It’s a similar story with SEV, which has been massively oversubscribed for bookings at its two outlets. This has given the founder of the business the confidence to line up three Puttshack crazy golf venues at a cost of £15m and to announce it will look to an initial public offering in the next five years.
We also have the Jones Bar Group adding two nine-hole courses to its Roxy Ball Room site in Manchester, which suggests this gaming phenomenon is not restricted to a London market looking for the next big thing.
What each of these new ventures has in common is that they are really bold plays by their founders and shareholders. Sites of 20,000 square feet do not come cheap in major cities and certainly one on London’s main thoroughfare would have been unimaginable without the challenges now being faced by major high street retailers who are vacating premises at an accelerating rate.
Personally I have always been a big fan of crazy golf and always take the opportunity to have a round – regardless of whether my children want to or not – when we’re on holiday in the UK. But this has been about the seaside experience – it is a world away from playing a round in a dark basement while guzzling cocktails.
But then I am undoubtedly a world away from the core customer of these venues. I’m more than happy to continue to drink in pubs that don’t have any music or a pub quiz, or even food for that matter. Aside from my own odd, apparently outdated preferences the jury is probably out on the longevity of some of the leisure experience businesses that are hitting the market right now and appealing to what are notoriously fickle customers.
Glynn Davis is a leading commentator on retail trends 

Straight statistics matter by Paul Chase

In my last article I launched the CPL Nanny State Annual Awards for Fake News and Phoney Statistics. Several people contacted me to ask if it was this tongue-in-cheek and whether misleading statistics really matter given the environment in which we live where information on social media sites such as Twitter have a shelf life attuned to the concentration span of a mouse. The answer is while our awards night will be light-hearted and enjoyable, the impact of fake news and phoney statistics can be serious indeed.
As an example, take the now-infamous quote from professor Dame Sally Davies, England’s chief medical officer of health: “There is no safe level of alcohol consumption.” And to illustrate the point she asks women to consider: “Do I want that glass of wine or do I want to raise my own risk of breast cancer?” Notwithstanding the fact she meant to say: “Do I want that glass of wine or do I want to avoid raising my risk of breast cancer?” It is the alarmist and misleading nature of the warning that is so damaging.
I am sensitive to the emotional nature of anything connected with cancer because it touches the lives of almost every family in the country, including my own. But let me explain why professor Davies’ quotes are so misleading and why they raise women drinkers’ concerns unjustifiably.
Firstly, the implication is one glass of wine a day will raise a female drinkers’ risk of breast cancer, and to most people that means raising their risk of dying from it because in the popular imagination cancer means death. The good news is if you are a middle-aged woman you have just a 0.3% chance of contracting and then dying from breast cancer over the next decade. And this chance is the same whether you drink alcohol or not. There is slightly more chance that as a light-to-moderate drinker your eventual and inevitable death will be from breast cancer, but only because light-to-moderate drinkers are much less likely to die prematurely from heart disease, and you must die from something, eventually.
An analysis of various causes of death of middle-aged and elderly Americans (Thun et al 1997) found that of the 251,420 women in the study, 0.3% of the non-drinkers and very light drinkers died from breast cancer over the ten years of the study’s duration. And the same percentage applied to the moderate to heavy drinkers. These were women drinking one to four standard drinks a day. In America a “standard drink” is about 14 grams of undiluted alcohol, so approximately 1.4 units. A woman drinking one to four standard drinks is drinking between 1.4 to 5.6 units of alcohol a day and has the same chance of contracting and dying from breast cancer as that of a non-drinker.
In a smaller mortality study (35,000 women, Fuchs et al 1995) the chance of death from breast cancer during the 12-year follow-up period was 0.4%, and this was identical for non-to-light drinkers and moderate-to-heavy drinkers. Again, crucially, there was a much higher chance of death from cardiovascular disease among the non-drinkers.
Reading all this confused me somewhat. I was sure there were numerous population studies that showed drinkers had a one percentile higher chance of getting breast cancer (from almost 10% lifetime risk to little more than 10%), and there are, but these are studies of “incidence” (how many women are diagnosed) not studies of mortality (how many women die). So women who drink alcohol have a slightly higher chance of being diagnosed with breast cancer but, if they are, they have slightly less chance of dying from it. That didn’t seem to make sense. I did a bit more research. It turns out about 90% of women who are diagnosed with breast cancer don’t die from it, partly because medical science cures many of them but also because many of the diagnoses are incorrect. Research also shows women who drink alcohol are more likely to screen more for breast cancer than non-drinkers (Mu and Mukamal 2016), so you would expect them to be disproportionately represented in the diagnostic figures arising from screening activity. So the link between drinking and the incidence of breast cancer is a statistical correlation, not a causal link – it is, in fact a self-fulfilling prophecy.
Here’s what professor Dame Sally Davies should have said: “When asking ‘do I want that glass of wine, or should I not drink at all’, women should balance a slightly elevated risk of getting breast cancer, which may be explained by the fact drinkers are more likely to screen for it, with the actual elevated risk of cardiovascular disease associated with not drinking at all.”
This is why straight statistics matter. 
Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy

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