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Morning Briefing Strap Line
Fri 21st Dec 2018 - Friday Opinion
Subjects: One voice, festive cheers, opportunity in experiences, Christmas presence and something old, something new
Authors: Kate Nicholls, Glynn Davis, Angela Malik, Ann Elliott and Alex Booth

One voice by Kate Nicholls

We welcomed more than 1,000 industry guests to UKHospitality’s inaugural Christmas lunch yesterday (Thursday, 20 December), building on a long-standing tradition from the Association of Licensed Multiple Retailers (ALMR) days.

In fact one of my first jobs working in the sector was when my boss at Whitbread asked me to help the ALMR organise its first Christmas general meeting. It is an honour and a privilege to be leading the united organisation today and to be the voice, champion and campaigner on behalf of UKHospitality’s 720 member companies and the millions of people who work in our sector.

The event always presents an opportunity to reflect, and 2018 will be remembered for a lot of things – the highs of the World Cup to lows of the unprecedented economic turbulence and, of course, the ongoing machinations of Brexit. We have had to navigate an unexpected and challenging landscape and it has never been more important to speak with one clear, loud, united voice.

UKHospitality’s creation has given us the opportunity to help politicians and the media better understand our economic, social and cultural contribution, and that has never been more important. We are front and centre of the political debate, changing perceptions, getting the recognition and profile the sector deserves. Creating one single, united voice representative of the whole sector has ensured we have achieved not only a seat at the table but also ensured our voice has not just been heard, it has been listened to – and we have seen real and meaningful action in response.

It has been a transformational year. For the first time, hospitality joined the five other major industrial sector briefings with the prime minister, as well as No 10 and Treasury business councils. We have also contributed to 11 Select Committee evidence sessions on Brexit, employment costs, business rates, regeneration, obesity and tourism tax; attended 66 ministerial meetings to press for changes in legislation; participated in the tourism and food and drink industry councils to shape the political environment in which we operate; joined mayoral commissions on food and the night-time economy, and the weekly Brexit planning meetings. We have been right in the thick of it.

Working with a broad coalition of partners we have made strong progress in all our asks. We know the sector still faces incredible challenges and headwinds and we remain focused on tackling these, but our vital campaigning work has saved the sector from an additional £2.4bn costs it would have had to find had ministers not heard, listened and moved position. 

Our message to government? We are a world-class, world-beating sector of growth champions. We are the third-largest private sector employer and last year generated one in eight of all new jobs, outperforming the economy and investing in high streets and communities across the country. But that success cannot be taken for granted. We will go on making that positive contribution, but only if we tackle the regulatory costs and burdens that stand in our way. 

Our pledge to government? Free us up to do what we do best and we will deliver our forecast 6% growth, 30,000 additional jobs and 200,000 apprenticeships.

Our priorities remain securing the right Brexit deal and migration policy to keep our teams supported while keeping prices low and consumer choices high and fighting for an overall tax regime that promotes productivity and competitiveness and incentivises investment in people and property.

Our first priority for the coming year is the “people challenge” – not just pushing back strongly on the government’s planned post-Brexit migration strategy but also promoting the sector as a great place in which to work, grow and develop.

In that regard, the government’s recent announcement of a sector deal for tourism and hospitality, only the sixth sector to receive such a deal, was a huge achievement. This is an endorsement of the sector as a career of choice, delivering good-quality jobs at all skill levels, along with our pledge to progress diversity and inclusivity through our new Plan B mentoring programme.

As we bid farewell to 2018, I’d like to thank UKHospitality members and industry partners for their continued support as we take our message to government about our potential and hospitality’s contribution, which will be key to unlocking more of the policy asks in a post-Brexit world. 
Kate Nicholls is chief executive of UKHospitality

Festive cheers by Glynn Davis

Every family has its traditions around the festive period that are religiously trotted out each year – mine is no exception. For us the one thing we have to do, irrespective of where we are in the country, is visit the local pub on Christmas Day.

For me the boozer has played its part on this big day for as long as I can remember. From when I was young and spending Christmas with my parents up to today with my own children, the pub continues to provide an opportunity to celebrate the occasion with the rest of the world beyond immediate family. Rather like watching the World Cup on the television in the pub, there is the added value of sharing the experience with a broader grouping.

The Sun Inn, The Green Tree, The Mallard, Marr Lodge, The Maypole, The Beauty Of Bath and The Salisbury Hotel are among the growing roll-call of pubs I have enjoyed a couple of pints in before Christmas lunch while mixing with die-hard regulars and extremely infrequent pub-goers.

Over the years I’ve enjoyed sharing a beer with people at Christmas time who I’d never typically see in the pub. During a period working in the City of London, I would visit The East India Arms pretty much every lunchtime with a group of colleagues and only once a year would one particular person join us – on the last working day before the office closed for the Christmas break. This minor change in the dynamic of the grouping made it one of the lunchtime highlights of the year.

I’m increasingly not alone in the pub playing an important role over the festive period. Almost three-quarters (72%) of people agreed it was a tradition for them to visit the boozer at this time, according to research by Greene King, which also found more than two-fifths (45%) of people are likely to visit the pub more often during the two-week Christmas period than a typical fortnight. Christmas Eve was found to be the most popular time, with 44% of people planning to visit the pub, compared with 34% on New Year’s Eve. 

What has changed over the years is the number of people eating their Christmas lunch in the pub. When growing up, a visit to the boozer was the preview before eating our meal at home or, more often, dining in a restaurant. The pub simply didn’t cater for this occasion.

How things have changed. The industry saw a 16% increase in the number of transactions on Christmas Day 2017 compared with the previous year. This equated to £6.5m of business done in the pub on 2017’s big day. With the average spend on the meal across a family being £64.14, according to Worldpay, this compares with an average £66.53 a family would have had to spend on groceries to produce the equivalent dinner. 

The key reasons people choose the pub is to avoid the hassle of cooking (39%), not having to deal with the dreaded washing up (38%) and to free up more time to spend with their families (32%). I’d go along with the latter but would add the communal aspect of dining out on Christmas Day is just as important because it is effectively extending the family on this one particular day of the year.

Although this year my family and I will enjoy our Christmas Day meal at home, we will be found beforehand at my local pub The Great Northern Railway Tavern (another one to add to the list) enjoying a few pints of beer but, most importantly, soaking up the atmosphere and keeping the family tradition going.
Glynn Davis is a leading commentator on retail trends

Opportunity in experiences by Angela Malik

The inaugural Experiential Leisure Conference, launched by Think Hospitality and Propel, was an excellent opportunity to learn and share views with sector experts and operators on the seismic strategic shifts happening in how we think about our bricks and mortar spaces. We face changing consumer tastes, a fast-moving digital landscape and a costly retail high street. Traditional food and drink business are being called to create physical, multi-sensory occasions that offer customers an enhanced IRL (in real life) experience. The conference speakers gave us their valuable insights into how they have successfully capitalised physical experience as the unique selling point of their diverse business models. 

“Experiential retail is not new,” said James Hacon, managing partner of Think Hospitality, opening the conference with an overview of the market and current trends. For generations past, the high street on a Saturday or, later, the mall was Mecca – a gathering place, an entertainment labyrinth, a food hall stuffed with choices. Fast forward to today, an era in which the digital world has taken social escapism to new heights, and millennials have a richness of experience. They seek things to “do” and focus groups show it’s not okay to “do nothing”. Memory has become the new product. As a society we are moving towards experiences as opposed to things:

– 50% of consumers would rather spend money on entertainment and events than material things
– 52% of consumers would rather tell a friend about an experience than a purchase they have made

Several key factors are driving this behavioural push towards experience. The influence of social media, particularly Snapchat and Instagram, promotes the attitude “I want to share stuff and I’m also seeing what my friends are doing”. This, in turn, creates a show-off, “peacock” factor. In an age when the art of conversation is dying, views are more influential than speech. 

The dramatic closure of major high street chains has led to increased availability of retail space and retailers are pushing more footfall-driving initiatives to bring people to their stores. Tie that into increasing travel, globalisation and the rising trend of teetotalism among post-millennial Generation Z and it means all customers want experiences.

At the conference, we heard from a top line-up of experiential leisure operators – Matt Grech-Smith, co-founder of Swingers with two crazy golf venues in London; Frankie Edwards, head of the Jamie Oliver Cook School; Josh Ford, co-founder of Time Run and creative director of The Game Is Now talking about the escape room phenomenon; and Toby Harris, chief executive of Social Entertainment Venues. 

What became apparent was the huge diversity of entertainment on offer, ranging from skittles, cocktail theatres and secret cinemas to darts, crazy golf, bingo and axe-throwing. Kitchen Theory founder and chef Jozef Youssef gave a fascinating presentation on the principles of experience design in gastronomy. He explained the utility value of eating had become greater as an experience rather than the food’s value. “Gastrophysics” (the sights, sounds, smell, touch and taste of food) is the practical application of how we engage food with people. Dining is a multisensory experience; how can we augment and tweak this? What made all these diverse businesses experiential was they were hands-on, shareable, competitive, social and visual.

Excellent insights for operators came from Nick Telson, founder and chief executive of DesignMyNight, a nightlife discovery website that allows customers to tailor their evenings out. It has seen a huge rise of bars and spaces where customers can “do” things with an 18% year-on-year growth in experience spend. The website’s top three searched-for words were “quirky”, “something different” and “secret”. However, Nick cautioned operators shouldn’t cut corners when delivering experience. His top tips for experiential spaces were:

– Instagrammable spaces
– Interactive “things to do” for customers 
– Finger on the pulse of what’s cool now 
– Cocktails that are interesting 
– Building in an element of secret or surprise 

Despite the challenging macro-environment, it is an exciting time for the hospitality and leisure industry. In my opinion the physical spaces made available by our bricks and mortar buildings should not be seen as a liability. They should be viewed as an opportunity to redefine how we engage with customers using the uniquely multi-sensory nature of food, drink and setting to create memorable IRL experiences. 
Angela Malik is strategy director at Think Hospitality

Christmas presence by Ann Elliott

Joy to the world, December is in full swing – our industry comes alive! I love it. One of the best bits of Christmas is researching what brands are doing to make the most of the party season such as an advent calendar of seasonal marketing. Everyone’s chasing the Christmas leisure pound but, with a recent article in The Times suggesting Christmas as we know it has started later and slower this year, the smart, seasonal marketing will make all the difference.

One noticeable element when searching online is the prevalence of Christmas-themed bottomless brunches. This is the experiential Christmas with brunches out catering to all tastes. A few minutes of Googling brings up plenty of options, from a 90s-themed brunch to a naughty Santa-themed version (there is even a Muppets theme), with many traditional options in between. 

Elsewhere, arguably the best tactical marketing to be seen is at Greggs, which has been selling Christmas merchandise including sausage roll phone cases (jumping on the cemented ‘secret Santa’ phenomenon) and Greggs-branded Christmas jumpers (smart with the growing interest in Christmas Jumper Day). Spot the trend and align to your brand. Clever and not too complicated.

In terms of quick service restaurants one major brand that’s really dialled up the novelty factor is Eat, with a roast dinner in a Yorkshire pudding wrap, a Keralan turkey curry and pots of pigs in blankets. Pret has really pushed the boat out too, as you might expect, with the introduction of seasonal drinks (an indulgent crème brulee latte and mint choc chip latte) offered alongside Christmas lunch baguettes, festive salads and mince pie cookies.

This season has seen brands apply a Christmas “twist” to their offer once again, particularly within fast casual. Subway is serving a Christmas Cracker sub with turkey, bacon, cranberry, orange chutney, sage, stuffing and gravy. All the trimmings – the novelty’s nice but perhaps not a perfect fit for its fast casual, time-poor audience.

McDonald’s approach has been smarter, linking the value of its late-saver menu to the big night out occasions prevalent during Christmas. One line from its social media marketing – “grab a late-saver menu snack and still have enough money for a taxi ho-ho-home” summed it up – helping McDonald’s become front of mind with carb-craving revellers attending Christmas parties.

Christmas represents great commercial opportunity but also great responsibility. What has been heartening is the increasing number of brands offering free drinks to designated drivers; far too many to name but hats off to the likes of Casual Dining Group and Greene King, who have really embraced the principle.

The ethos of doing the basics right rings particularly true at Christmas. Some of our (super talented) research and insights team were at Westfield London last weekend conducting research for one of our clients. They returned enthusiastic about Bill’s and its ability to ensure it had a core basic right – opening. Bill’s was the only breakfast to be found inside the shopping centre – benefiting from families who had come in early to visit Santa’s Grotto before many shops had opened their doors. Bill’s was one of few brands in the vicinity with the nous to see there is more to footfall than simply looking at retail opening hours and aligning accordingly.

In the final days building to 25 December, rather than preparing a turkey feast some of us keen to avoid the hassle of cooking and washing up are booking Christmas dinner out. Recent research by Worldpay showed spend in restaurants on Christmas Day increased 5.7% in 2017. This year brands including Toby Carvery, Miller & Carter and PizzaExpress have capitalised on this trend by offering Christmas Day set menus consisting (mainly) of festive twists on core dishes. 

Giggling Squid’s approach to Christmas Day is bold – bucking the trend of tradition and keeping on-brand with a fully Thai menu – perhaps one that will appeal to experiential-seeking millennials? Perhaps we’ll see a rise in non-traditional Christmas dinners in 2019 as consumers continue to nurture more exotic pallets. I am also interested to see how Deliveroo performs this Christmas.

It’s encouraging to see many brands are offering something different this Christmas in a bid to stand out for the increasingly promiscuous consumer. Moving towards the Christmas periods of 2019-20, I wonder if our sector will be offering more all-vegan Christmas menus, less traditional flavours and focusing on zero waste innovations. Perhaps we’ll leave that to their new year’s resolutions.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector –

Something old, something new by Alex Booth

The rush to herald the next big thing or latest technology innovation means we often overlook the more established and traditional aspects of what makes a good pub business. Ahead of the Pub19 show in February, we conducted a consumer survey to look in greater detail at what today’s pub-goers want, and expect, their pub to deliver. 

The findings highlight the contradiction currently at play in the market. For every person surveyed who called for table ordering, there was another that enjoyed their pub visit without the intrusion of technology. Such is the fine line operators have to walk today.

Indeed it is no surprise pubs need to cater for all tastes when it comes to food. When consumers were asked what pub grub should feature, about one-fifth plumbed for traditional fare – roast dinners, pies, fish and chips – against one in six who said it should be modern and varied (tapas, sushi etc). 

However, the next three significant responses highlighted how consumers have become more educated – and demanding – in what they expect from pub operators. Locally sourced produce was the top answer (22%), closely followed by the demand food should cater to “everyone” (vegetarian and vegan, for example) and be seasonal (15%). 

What we have seen in recent years is major managed operators such as Young’s and Fuller’s investing significantly to ensure their menus match these touchpoints. Up and coming regional players such as Seafood Pub Company are also tapping into local suppliers and highlighting the provenance of their offer. 

Traditional, for the moment at least, is also the expectation of consumers when it comes to picking which pubs they visit and what entertainment they crave when there. When asked what factors are most important to them when visiting a pub, “atmosphere” came top by some distance followed by a decent outdoor space, interior design and good background music. Although sporting events can be a sales driver, only 5% of those questioned felt it was important to their visit – the same percentage felt the same about happy hours, with both ranking behind live music as a draw. 

A lot has been said recently about the rise of the experiential segment of the market, although some would argue the pub has always been the forerunner and greatest exponent of this “new” trend. When asking consumers which games and experiences they are most likely to take part in when visiting a pub, more established activities such as darts, pool and the humble pub quiz remain popular. 

“Tastings” proved a popular response, something many leading pub groups and independents have brought to their offers and which are proven to be a key way to drive sales in the traditionally slower parts of the trading week. For example, Brewhouse & Kitchen has tapped into this trend with its experience days, in which customers can brew and taste their own beer. Not only is it a great way to drive different revenue but also build lasting loyalty.

At the same time, operators such as Arc Inspirations have evolved traditional pub games by adding a modern twist. The fast-growing bar business recently invested £1.4m in a Leeds site for its The Box brand, which majors on creating memorable customer experiences. The site includes two full-size shuffleboard decks and an area for electronic darts.

Underpinning these results were signs the traditional games and experience mix may be changing. Mini-golf, interactive theatre, escape rooms and even virtual reality experiences all got mentions. All of the above are now being incorporated by operators to provide a point of difference and offer a communal and competitive experience, key touchpoints for the next generation of pub-goers. We are seeing operators such as Laine Pub Company providing virtual reality rooms in some of its pubs, while Bermondsey Pub Company, part of Ei Group’s directly managed house business, launched its first interactive escape room in partnership with Handmade Mysteries.

And the reason people still go to the pub to try these experiences old and new? The three most significant answers were to “socialise”, “eat” and “drink”. These remain the key pillars that drive pub visits but a closer look under the bonnet shows the sector is becoming far more nuanced in terms of what people expect to find when they arrive.

You’ll be able to collect a copy of the full Pub Trends Report at Pub19. To register for the show, click here 
Alex Booth is commercial manager at Pub19 – the only dedicated show for the UK pub industry

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