Propel Morning Briefing Mast Head CPL Learning Link Paul's Twitter Link Greene King Banner
Morning Briefing Strap Line
Fri 5th Apr 2019 - Friday Opinion
Subjects: No-shows are a no no, mitigating Brexit food threats, sweat the small stuff, and PPL-ease don’t stop the music
Authors: Glynn Davis, Mike Williams, Ann Elliott and Andy Hill

No-shows are a no no by Glynn Davis

Whenever I make an appointment to visit my dentist I get bombarded by reminders in the run-up to the visit – texts, emails and a phone call.

The reason behind this intrusion is the horrendous number of no-shows my dental practice suffers. The interesting point is the people who fail to turn up without cancelling their appointment are almost universally individuals who don’t have to pay for their treatment, according to my dentist.

There are no fines or penalties for no-shows so we can conclude the reason one grouping invariably turns up is because they have booked time off work so the hours they are committing to the dentist have a monetary value. For those who ultimately don’t pay for their treatment there is likely to be a more relaxed attitude to turning up for appointments. 

For my dentist this is a big problem and one nigh on impossible to overcome – even when sending myriad reminders – because there’s zero chance of them being able to introduce a deposit system whereby the amount is forfeited by no-shows. Even if by some miracle the NHS gave my dentist the go-ahead for such a system, no doubt there would be an outcry and the loss of a lot of patients.

Although restaurants suffer from the same issues with equally horrendous levels of no-shows, at least they are in a position to introduce deposit systems to try to reduce the problem. Edinburgh-based brasserie Dine was reported to have lost as much as £2,700 through last-minute cancellations and no-shows on Valentine’s Day, when it brought in specific foodstuffs for its one-off menu. In a state of shock, no doubt, it then sent out a Twitter poll in which 57% of responders said they would be happy to pay a deposit, while a further 34% would be fine with securing bookings by supplying credit card details. 

In my opinion these results are questionable. Even though consumers invariably say they are happy to pay a deposit, my experience suggests they say one thing and do the complete opposite. In these days when people increasingly want a frictionless (and flexible) lifestyle, my instinct suggests many would find the idea of deposits and a potential loss for not showing up or cancelling last minute unacceptable.

It’s hardly a coincidence young people are driving the move to friction-free experiences (with contactless payments and mobile devices at the heart of many of their interactions) and they are also the most likely demographic to commit a no-show. A quarter (25%) of 16 to 24-year-olds admit to regularly failing to show up for a restaurant reservation, according to research by OpenTable.

For OpenTable the solution is to ban people from its platform if they fail to show up four times for bookings they have made in a 12-month period. This is a welcome step and we’ll see if it brings any positive change but it’s easy for offenders to simply book on another platform or under another name. 

Perhaps the industry needs to look at the one positive note coming out of the research – 71% of people who failed to honour a reservation did at least feel some guilt for letting the restaurant down. What’s required is for the offenders to be shamed in some way or for it to be made clear the potential implications of their actions – it’s not a victimless crime.

With billions – £16bn in 2016, according to ResDiary – lost through no-shows every year, the reality on the front line is under-pressure restaurants don’t need the added burden of being let down by irresponsible customers who don’t understand the financial damage they are inflicting on their favourite restaurants. If they don’t get the message, perhaps we should send them to the dentist for some unnecessary treatment – but we know what would happen, don’t we?
Glynn Davis is a leading commentator on retail trends

Mitigating Brexit food threats by Mike Williams

Imagine this, no fresh fruit and vegetables, perishable food stuck at British ports for days and supermarket groups commandeering the lion’s share of any produce available.

No, it’s not a dystopian future fantasy or wartime flashback – these are a few of the, admittedly worst-case, Brexit scenarios being discussed in hospitality food supply circles.

Frustratingly for UK businesses, clarity over Brexit remains elusive. Just this week MPs decided to take control of Brexit from Theresa May’s government by one vote and force the prime minister to ask for another extension to Article 50 to prevent “no deal” next Friday (12 April).

As I write this, it’s still unclear whether the country will be granted a longer extension to negotiate to avoid “no deal”. Options run the gamut, from a deal between May and opposition leader Jeremy Corbyn, another referendum, a general election or possibly no Brexit at all.

With so much uncertainty, what will Brexit mean for food supplies in the hospitality sector?

I think the big issue will be at Dover. Almost half (48%) of UK food is imported, with almost four-fifths (79%) of this coming from the EU, the majority of imported food coming in through the port of Dover.

Even if the UK says no to border checks as soon as the French add checks, even an extra 90 seconds would create a concertina effect. Queues would quickly move from zero to two hours and, in a short time, two days. Last month’s strikes by French customs officers, protesting against a lack of preparation for Brexit, gave a little taste of the chaotic scenes we could see port-side post-Brexit.

It doesn’t help that the food industry has become reliant on “just in time” services, leaving it vulnerable to any kind of delay. You only need to have a two-day delay for containers of, say, bananas or Spanish fruit and realistically you’ll face a problem with the quality.

Stockpiling might seem the answer but large suppliers have already said that would be a relatively useless move – although they admit to doing it to some degree. They are buying more freezer space but having to use working capital to pay for it.

Of course whichever way the EU exit turns out, we aren’t going to run out of all products. The UK is self-sustaining in foodstuffs such as milk and bread, although less so in others such as meat. And when it comes to accessing what’s available, UK hospitality businesses may find they aren’t at the front of the queue. With UK-produced food, the issue is the majority of it is snapped up by supermarkets. For hospitality, the difficulty will be getting food away from the retailers.

Even with all this to consider, there are things businesses can do to mitigate potential problems. Food buyers and menu planners could bring back a level of seasonality and chefs already look to reformulate recipes when products are unavailable.

Reformulation could also help businesses manage the issue of an increasingly weak British pound. The cost of imported goods is already rising as the pound falls on the back of Brexit uncertainty.

One hospitality professional to experience rising food costs is Philip Chambers, general manager at K+K Hotel George in London. He told me his concerns that the value of the pound had fallen by up to 25% in the past 12 months leading to food cost rises across the board. He told me the hotel re-engineers its menus only for the prices to rise again.

Ahead of Brexit, and to prepare for even more price rises after the UK leaves the EU, K+K has streamlined its supply chain so it can buy in bulk – but there is a downside, this shift has prevented him from buying locally as the hotel can’t match the prices.

He told me a switch to a bigger supplier with large stock holdings had reduced anxieties about food delays at ports but said food cost increases were already eating into profits. The hotel’s largest revenue for food comes from breakfast, so if food prices keep rising the hotel could end up running breakfast below cost. If that happens, the company might need to change to inclusive breakfast rates instead.

K+K Hotel George is just one example of a business that’s approaching the potential impact of Brexit in a proactive and pragmatic way. With so much still up in the air, I still retain a glimmer of optimism about leaving. I don’t think Brexit will be the cataclysmic chaos some media are suggesting. Food businesses will find a way.
Mike Williams is operations director for Food Alert

Sweat the small stuff by Ann Elliott

I spent two days last week visiting pubs on behalf of one of our clients (sometimes I think I have the best job in the world) putting myself in the shoes (and minds) of its customers. The client has a strategy brief that can only be answered by understanding customer motivations and behaviours (as most strategy briefs have to) and much of that can only be appreciated by sitting where they sit and doing what they do.

During the day I would try to understand “why has that couple left their home, got in their car, spent money and then sat in silence in this pub?” or “why has that group of women come to this pub rather than the coffee shop down the road?” or “why has that man come here to nurse a single pint during the course of a lunchtime?” As an overview, I want to try to understand customer motivations for coming to the pub and appreciate what they expect, want and need from that visit.

They’ll all have different reasons for their choices, which we’ll pick up in this particular project through focus groups and face-to-face interviews as well as pub visits. While quantitative data is imperative, nothing beats listening to customers, seeing their reaction to suggestions and watching their gestures before exploring the detail. It’s also vital to appreciate what guests don’t say – and to listen to their silences.

However, not much beats getting out and about and watching things happen in situ – I love it. Watching what happens when customers are eating and drinking out has become even more imperative these days when customers have so much choice where they spend their money and time. For many, a meal out can be the equivalent of feeding the family from Monday to Friday, buying shoes for their kids, ordering a dress from Asos or starting to save for Christmas. If their time out doesn’t represent value compared with what else they could have done with their money, they feel guilty and angry at the venue. It’s a lose-lose.

Those value-for-money perceptions are usually based on many different elements rather than a single defining moment. When in one of the pubs I asked for two coffees and a tea. “We haven’t any coffee, the machine is broken,” came the reply. I asked for instant coffee. “No, I told you the machine is broken.” With that the woman behind the bar turned her back on me and went to talk to the machine engineer.

Written down, that exchange doesn’t look too bad but face to face her attitude was one of “I don’t really give a monkeys what you want”. If that exchange had been part of a well-earned evening out I chose above buying essentials it would have drained the emotional bank balance I had with that pub and forced it to work extremely hard during the rest of my visit to rebuild it (if, indeed, that were possible).

Some pubs and restaurants, multi-site and independent, don’t get this. They don’t appreciate the terms of their contract with guests. They don’t understand their customers and what the quid pro quo is for each of them. Neither do they know what levers they have to pull (or not pull) on the tiniest element of their offer to disappoint or delight customers.

The tiny, imperceptible things matter – a crisp packet in the car park, a peeling sign on the door, tone of voice, having to ask for a menu, no crayons for the kids. I could go on but you know what I mean. It’s about sweating the small stuff because getting the small stuff wrong means customers walk (and talk). That’s where watching and listening to customers, objectively, is so powerful.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector –

PPL-ease don’t stop the music by Andy Hill

In the vibrant world of hospitality, music is essential. It creates atmosphere, denotes the mood of a venue and can be an important factor when driving sales. Customers don’t just expect venues to offer good music, they demand it as part of their overall experience. It can play a big part in their decision to venture into pubs, bars, restaurants and other hospitality businesses. So it’s no surprise in an already tough and competitive market place operators are frustrated PPL has misunderstood the current climate drastically by announcing its new, increased Specially Featured Entertainment (SFE) tariff. 

It’s easy to understand the frustration the music sector feels when it sees crowds of people listening to music and only receiving a small fee in return. But for many operators the proposed increase in SFE tariffs could have devastating effects and UKHospitality has estimated businesses will be hit by an average 137% increase, costing the hospitality sector upwards of £49m. With the majority of sector businesses being SMEs whose profit margins are already under extreme pressure, it’s not hard to see the negative impact this would have and the current anger expressed by the industry.

I acknowledge PPL is attempting to balance the requirements of its members and put a scheme in place that properly recognises the value music brings to businesses. However, in my experience the music industry has a habit of overcomplicating licences to extract the maximum fees for its members. Often the auditability is impossible and the enforcement process costly, complex and ineffective. In the case of the new SFE tariff, for example, asking operators to count the number of consumers in their venue and grouping them into bands of 25 is entirely the wrong implementation. Who is realistically going to count every person in and out of a venue or space? Many years ago the BBC agreed to identify all the music it uses across its broadcast network to meet the requirements of PPL and PRS. It currently has more than 2,000 staff who, as part of their job, document and report the 256,000 pieces of music the BBC plays each week. With the kind of technology around today, why is the BBC being asked to report the music it uses? The hospitality market should resist music licences that burden them with costly red tape such as counting how many people are dancing in each venue.

The SFE licence creates an administrative burden on the hospitality trade but it should consider using technology instead. For example, Startle has developed technology that works out how many people are in a venue and automatically adjusts volume levels. Why can’t this technology be replicated to see how many people are in a venue for licensing reasons? It’s accurate, auditable, enforceable and better for operators and PPL alike.

I think the licensing system needs to change to reflect modern hospitality and its use of music. However, to introduce a system that isn’t auditable or economically enforceable is meaningless. Under current proposals, PPL could potentially claim high revenues but I predict the opposite as venues default to declaring the minimum or, at worst, not declaring SFE at all to avoid the administration. Nobody wins in that scenario. 

My advice to the hospitality industry is to resist music licences that require a heavy level of administration and cost. However, I would caution against using the Copyright Tribunal. Cases are costly, protracted and time-consuming and should always be a last resort. In my experience, PPL has good people who are prepared to listen and work towards a mutually beneficial outcome.

To PPL, I would say take a step back and try to understand what has caused such an angry reaction from the hospitality sector, which is now focused on taking the matter to the Copyright Tribunal. Offer another review of the SFE licence to see how it could be better implemented. If more venues declared SFE because it was auditable and enforceable, even at lower prices you might increase your revenues.
Andy Hill is chairman of Startle, music and technology provider to the hospitality industry

Return to Archive Click Here to Return to the Archive Listing
Punch Taverns Link
Return to Archive Click Here to Return to the Archive Listing
Propel Premium
Quickpad by Pepper Banner
Growth Partners - Find out More Banner
Santa Maria MEXI-GO Banner
Quickpad by Pepper Banner
Contract Furniture Group Banner
Bizimply Banner
BrewDog Black Heart Banner
Heineken Silver Banner
Peppadew Banner
Propel Banner
Quickpad by Pepper Banner
Access Banner
Christie & Co Banner
The Licensees Association Banner
Airship – Toggle Banner
Libeo Banner
COREcruitment Banner
Hospitality Rising Banner
Cynergy Bank Banner
John Gaunt Banner
Zonal Banner
HGEM Banner
Bums on Seats Banner
BrewDog Black Heart Banner