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Morning Briefing for pub, restaurant and food wervice operators

Fri 16th Feb 2018 - Friday Opinion
Subjects: United voice will underpin hospitality’s future, full steam ahead and six thoughts from the past six days
Authors: Kate Nicholls, Glynn Davis and Ann Elliott

United voice will underpin hospitality’s future by Kate Nicholls

In five days’ time, the members of the UK’s two major hospitality organisations – the Association of Licensed Multiple Retailers (ALMR) and the British Hospitality Association (BHA) – will vote on a proposed merger to create one body, UKHospitality. 

I am extremely proud we find ourselves at this momentous juncture. The creation of UKHospitality would make us bigger, stronger and more powerful, transforming our influence in government and delivering a greater voice in the national media. 

However, as this process nears its conclusion I am acutely aware we must not lose the strength of our constituent parts and must grasp the opportunity to make sure a new entity is more than the sum of the two current trade associations. We are extremely mindful of the need to maintain effective and resolute representations of all the major sub-sectors of hospitality and of our membership, not least pubs, bars and late-night operations.

From an ALMR perspective, such businesses represent the roots of the organisation and we have an unwavering commitment to ensure the companies that gave rise to the ALMR’s creation more than 25 years ago remain at the heart of the enlarged body. The creation of a larger representative group gives all of us an opportunity to reshape the future of hospitality by having a voice that matters and makes a difference as we tackle some key collective challenges.  

More members, more clout
Hospitality is massive and growing fast, employing more than 2.9 million people. It is the third-largest private sector employer – bigger than automotive, pharmaceuticals and aerospace combined, and twice as big as financial services. Last year, it accounted for one in eight of all new jobs and is on course to deliver 200,000 apprenticeships by 2020. The sector also generates £38bn in tax for the exchequer, helping to fund vital public services. That is equivalent to the UK’s annual defence budget!

This is why we matter and why we need a greater voice. Merging the ALMR and the BHA would bring together more than 700 businesses from all aspects of hospitality including pubs, restaurants, hotels, leisure parks, coffee shops, nightclubs, contract caterers, visitor attractions and many more. 

Tackling challenges head on
While there will naturally be a diversity of membership in the proposed new association, we are united by many common themes and issues – taxation, tax equality, regulation and red tape, cost of labour, cost of goods, property and planning, pressure on discretionary spending, the consequences of Brexit and so on. These are the big lever issues where our size and voice will enable us to stage greater interventions that deliver meaningful change.

A unified careers campaign
Careers and opportunities are at the heart of what the hospitality sector offers British society. It is a true meritocracy where people can progress from pot-washing to the boardroom.

Our sector can boast many great examples of entrepreneurs, managers and senior executives in the sector who started their careers pulling pints, serving coffee or on graduate schemes and worked their way up. Every day our people benefit from an exciting combination of professional training and development and on-the-job, customer-facing experience. One of the priorities of UKHospitality would be to deliver an integrated careers and skills strategy for the sector.

The power of the union
The combination of the ALMR and BHA is an incredibly good fit. It brings together high-level skills and competencies that exist within the combined head office teams. The proposed merger would create a dynamic association with strong technical expertise and counsel for members across a range of issues, allied to a lobbying function that boasts a proven track record of engaging ministers and government departments to the benefit of all – as evidenced by notable successes on business rates and a delay in punitive National Living Wage rises. 

The new association would operate advisory boards featuring senior figures from the existing ALMR membership so we would continue to remain close to our roots and hear the voice of our core members loud and clear.

We must use the greater opportunities this significant scale would bring, allowing us to stage vital interventions on essential issues for our operating member companies be they pubs, bars, restaurants, clubs, contract caterers, hotels, coffee shops or visitor attractions. 

For our fantastic sector to be better heard and heeded by politicians, and understood and respected by the media, I urge members of both trade associations to vote for the merger and allow us to create a powerful voice for the whole of hospitality. 
Kate Nicholls is chief executive of the ALMR

Full steam ahead by Glynn Davis

Visiting Amersham recently for a meeting in an award-winning pub reminded me of the time some years ago I was judging a pub of the year competition in the area and thought the landlord of one shortlisted pub was joking when he said hosting wakes had become a serious revenue stream.

Nowadays, in this post-smoking ban world, wakes are a decent earner for a number of pubs that have become a lot more entrepreneurial in the way they sweat their bricks and mortar assets.

I’m thinking of letting my wife know I quite like the idea of being remembered at a wake held in one of my favourite pubs (yet to be decided). This would follow a general theme running through my life of pubs playing a starring role at the most important events.

I have celebrated my 18th, 21st, 40th and 50th birthdays in the boozer (and many others in between), along with meeting my wife in a bar, having our wedding breakfast in a pub, and holding christening celebrations of my two children in pubs.

It seems I’m not alone in having the pub as a central part of my life. An Ei Group survey found 25% of people also met their partner for the first time in a pub. In my case, my mother also met my wife for the first time in a boozer. The survey also found 10% of people would pay more for their house if it was near a good pub. I have to admit I’d only buy a house if it was near a good pub.

But I don’t just use the pub on special occasions – I’m in the category of loyal pub-goer. Thankfully, a hefty 27% of people in the survey also said they visit a local pub at least once a week. As good as it sounds, that figures seems high to me and I wonder if Ei Group undertook the research in its pubs?

If people across the country were really this loyal to pubs I suspect we wouldn’t have on-trade sales falling by a chunky 2.4% in 2017 – the biggest drop in four years, according to the British Beer & Pub Association (BBPA). This is the 17th consecutive year of decline. The BBPA calculates the fall last year as the equivalent of 85 million fewer pints sold compared with 2016. This doesn’t equate to less total beer being consumed because overall beer sales rose 0.7% in 2017, it’s simply a case of pubs and bars taking a hit once more.

There clearly needs to be more loyalty to the pub and an increase in visits by more people. One particularly bright spot on this front comes from Network Rail, which revealed sales at its station pubs and bars increased in the April to June quarter by 6%.

This reflected a renaissance in the train station pub, with numerous operators looking to gain exposure to the country’s transport hubs after the success of the likes of Pivovar Group, Fuller’s, Young’s and JD Wetherspoon. Cameron’s pioneering Head of Steam chain was above them all, with BrewDog about to join them after signing a partnership with The Restaurant Group to open bars in UK railway stations and airports.

Such pubs tap into customers’ increasing desire for convenience. Having a swift beer before diving on the train home couldn’t be easier. Commuters using pubs is good news indeed because this could equate to regular pub-going and generate the sort of loyalty pubs desperately need. It’s clearly far better that people associate their pub visits with regular activities such as commuting than with less frequent events such as wakes or 50th birthdays!

A pub has just opened near me in north London that has been carved out of a public toilet. I can’t think of an association that is more regular than that, nor what beats it for convenience either – certainly in my case anyway.
Glynn Davis is a leading commentator on retail trends

Six thoughts from the past six days by Ann Elliott

Why did the Mail Online publish an article yesterday entitled “The great chain restaurant rip off”?
The subhead read: “Why the value-for-money chains aren’t what they seem.” It’s as though the writer doesn’t understand the basics of restaurant economics, has never read a profit and loss report from a hospitality business, and has never talked to a financial director in the sector. Or perhaps they have, and they just don’t care. It’s purely a sensational article designed to enrage readers and make them think twice about going out to casual dining chains. The best comment in response came from Wagamama, which said: “The suggestion of huge mark-ups is both factually incorrect and very misleading.” I couldn’t agree more.

Does anyone really pair drink and food nowadays?
Of course I see people drinking white wine with fish and red wine with beef but generally it seems to me people are becoming less concerned about what they drink with which dish. They have moved on, and the market has moved on. Consumers don’t seem to care what they drink with which dish these days – if they like a drink they will drink it whenever and with whatever. Yet many marketers continue to talk about food and drink pairing as if it’s the holy grail. I don’t think it is.

Is Vapiano under-rated?
I went to Vapiano yesterday for the first time for a while and was amazed how busy it was at 3.30pm. It was rammed, as busy and diverse as Nando’s, easy to use, easy to navigate, and buzzy and lively. Some customers were there for three-to-five minutes and others looked as though they were staying all afternoon. It was good value, too, and served great-quality, fresh food made in front of my eyes. Vapiano has been both innovative and consistent in the past few years and it was brilliant to see it doing so well.

Why doesn’t Pret double the size of its Euston site?
Probably because it can’t might be the simple answer. I have gone there three times in the past fortnight but, on each occasion, have turned round and come straight back out because the queues were so long. That puts me off the brand overall – a shame. There must be some other way to sort out speed of service at busy times?

Which is the better restaurant – Blacklock or Flat Iron?
A meal for four at Blacklock the other week was £138 for four plates of prime rib, a carafe of wine, a coke and a coffee. Seems like a lot of money but it was fantastic and a really brilliant experience with awesome service – an evening to remember. At Flat Iron, I had to wait almost two hours for a table and the service wasn’t quite as memorable. However, it was cheaper and another brilliant night. A draw I think – I love them both!

Why isn’t Rhubarb better known?
Anyone who has been to the Sky Garden must be in awe of this business – a huge, complex operation run by Rhubarb that turns over millions of pounds a year. The company also organises and caters for sophisticated weddings and events, operates other restaurants such as Gallery Mess at Saatchi Gallery, and provides food and drink at prestigious locations such as the Royal Albert Hall. I often think contract caterers are treated like the poor relatives of this sector but there are some amazing operators out there that deserve our respect and admiration. Rhubarb is one.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – Follow her on Twitter: @elliottsagency

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