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Morning Briefing for pub, restaurant and food wervice operators

Fri 7th Aug 2020 - Friday Opinion
Subjects: The risk game, best seat in the house, and the importance of talent and technology
Authors: Paul Chase, Glynn Davis and Dan Maimone

The risk game by Paul Chase

My last article for Propel was entitled ‘The numbers game’ and this is the second in a series of three about the importance of numbers, our ability to assess risk and how this translates into government policy. For the first part of this article I’m indebted to David Paton, professor of industrial economics at Nottingham University Business School, whose analysis I have summarised below with my own comments added.

Paton reviewed the effectiveness of lock-downs in reducing cases of, and deaths from, covid-19 by taking a rational look at costs and benefits. Given the huge economic cost of lock-downs as well as costs associated with postponed operations, children not in school, and the rise of depression and anxiety in the population, he argues the benefits would need to be considerable to justify such costs. He sketches out four scenarios:

Scenario one 
Lock-down leads to a lower final rate of cases and hence deaths. Given the enormity of the costs we would need a big reduction in deaths to justify a lock-down, and don’t be sidetracked by the narrative “but if it saves even one life, it’s worth it”. No society takes such an absolutist view of risk. For example, we allow children to cycle to school knowing some may be knocked off their bikes and killed. The same “if it saves even one life it’s worth it” argument is regularly trotted out to justify compulsory mask wearing.

Scenario two
Lock-downs don’t reduce the total number of cases but spread them out over a longer period to prevent the health service being overwhelmed. Therefore lives are saved because hospitals can cope with the level of infections – “flattening the curve”. This was the argument for the UK lock-down based on what we now know was flawed modelling suggesting half a million deaths without one. We now know cases peaked and were coming down before lock-down was even implemented. However, to be fair to the government, hindsight is a wonderful thing.

Scenario three
Lock-downs lead to a reduction in cases and deaths in the short run but not in the long run as cases rise when lock-down is eased. The only possible benefit in this scenario is if cases are delayed long enough for an effective vaccine to be developed and made widely available. Given the timing and development of a vaccine is uncertain but the costs very certain indeed, this doesn’t provide a good justification for lock-down policy.

Scenario four
Lock-downs don’t lead to any significant reduction in cases or deaths, even in the short term. This would be devastating for lock-down policy as it suggests huge costs with zero benefits. We might call this the Peter Hitchens critique!

Paton goes on to point out areas with some of the highest death rates also had strict lock-downs – Spain and New York, for example. When the dust settles and we review all this it’s unlikely we’ll find lock-downs had a large impact on deaths. Other measures – strong advice to the public communicated clearly, hand-washing, social distancing, banning mass gatherings – are more likely to have been effective. This is sometimes called the “Swedish model”. It’s highly likely national preparedness, adequate stocks of PPE, scale of testing and population characteristics, such as the age structure of the country, are much more likely to have an impact on national caseload and overall mortality.

Which brings me neatly to Public Health England (PHE). As I made clear in my last article, PHE isn’t “the government” but it has £1bn a year of taxpayers’ money to spend directly on public health. Last year it spent £52m on preparing for infectious disease prevention and £200m on ridiculous campaigns against obesity. In my previous article I concluded the pandemic should cause PHE to refocus its efforts. I wrote: “If the experience of this pandemic brings about that refocusing and ends this obsession with lifestyle diseases, at least some good will have come from it.” That one lasted well! Within days PHE was stressing the link between the risk of dying from covid-19 and obesity. This is a typical “dead cat” manoeuvre from PHE to distract from its failure to prepare for covid-19 and the revelation it had been counting deaths from it in a way that inflated the numbers.

According to the PHE, if you have a body mass index of between 30 and 35 your risk of death from covid-19 increases 25%. This is a classic misuse of statistics – state the increase in risk without stating the size of the base risk that’s being increased. In other words, is this a big increase in a big risk or a big increase in a small one? 

Let’s do the maths. According to the Office for National Statistics about one in 2,300 people in England had covid-19 in the middle week of July. In a population of 56 million that means the total number of infected people was about 24,350. If we assume a reproduction rate of one – that each of these infected individuals will infect one other person within 14 days – the period they might be shedding virus – the total number of people infected in a year is 633,100 (24,350 x 26). If you divide 633,100 by 56 million and then multiply by 100 divided by 1, you arrive at the percentage chance of being infected – 1.13%. But if you are one of the 1.13%, what’s your base risk of dying? 

According to the Centre For Disease Control, the infection fatality rate is 0.26%. That means the average chance of a person in England catching covid-19 and dying from it is 0.0029% (0.26% of 633,100 is 1,646 deaths which is 0.0029% of 56 million). Add the 25% increase in the risk of death caused by obesity and it comes to 0.0036% or one in 27,777. The overall risk of dying from covid-19 is tiny, the increase in that risk if you’re obese is miniscule.

Hey presto! With just one piece of statistical sleight of hand PHE justifies its lifestyle disease obsession by reference to covid-19 deaths – and no-one in mainstream media calls this out for the nonsense it is. Without reliable statistics provided by a de-politicised public health establishment, how can people assess risk rationally or the government fashion policy that balances costs and benefits? Public Health England must go.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

Best seat in the house by Glynn Davis

Charles Wells’ pubs in France have been a quiet success story as the portfolio of outlets has grown on the back of young French drinkers’ appetite for the unique British bar vibe the UK operator has shipped across the Channel.

One of the key components of this has been the hubbub around the bar. Unlike French bars, Charles Wells’ venues operate the traditional UK pub style, with customers having to order at the bar rather than through table service. This has proved appealing for the younger demographic, who have enjoyed the buzz it creates around the bar.

This is one of the things I find most appealing about the British pub. The anticipation when pulling up a bar stool and taking a spot among the regulars right at the heart of things is a great joy. It provides the opportunity to engage with the team behind the bar and the other customers congregating there – if you wish to converse, that is.

My first venture into the pub after lock-down came during a family holiday in Kent, where the new rules of table service only and no loitering at the bar didn’t greatly affect me. However, when I returned to my local – The Great Northern Railway Tavern (GNRT) in north London – it was much more noticeable how things had changed.

Gone was the line of stools, while new etiquette dictated I was escorted to a table. Thankfully the pub was quiet and I could choose my favourite table – the one closest to the bar. This afforded me the possibility of at least being able to – in a loud voice – hold a conversation with those serving behind the bar.

The move to table service only, with everyone spaced out around the room, meant regulars I’d see perched on bar stools pre-covid were absent. The GNRT, like many other bars, has lost some of its most regular customers. Those people who would pop in a few times a week, always on their own, sit at the bar and enjoy a bit of banter with the bar team are nowhere to be seen.

This is worrying because for many this may be one of their few opportunities to socialise. At the GNRT, regulars like myself who sometimes visited solo but also did so with family and friends have largely returned since reopening. But those people who only visited on their own haven’t been seen since lock-down was imposed. This has led the pub to consider trying to contact them to check how they are and perhaps make a table available for them to use collectively – with social distancing procedures in place, of course.

Much has been made about the impact covid-19 has had on mental health and well-being, with many people suffering from the isolation it has enforced. However, little sympathy has been conveyed towards people whose local pub is their lifeline. The fact alcohol is involved invariably diminishes the story. It’s the same with betting shops. I’d argue that for many people these places are also genuine social hubs but the broad narrative will always be overtaken by the issues of alcoholism and problem gambling.

As covid-19 plays out during the forthcoming months we’ll hopefully see a further easing in society and a vaccine arriving sooner rather than later. To me, the real barometer of life returning to something akin to the old normality will be the reappearance of the humble bar stool. While my affinity with them is simply based on a preference for sitting amid the action at the bar, for many others up and down the country – and probably in France too – the bar stool represents something much more important.
Glynn Davis is a leading commentator on retail trends

The importance of talent and technology by Dan Maimone

I want to take you back to a time when I was about five years old and nothing worried me more than being lost in a big shop away from my parents.

Once when we were in Toys R Us I became distracted by the latest Jurassic Park toys and, before I knew it, was standing by the electric ride-on cars alone. A sense of panic set in and I didn’t know what to do. Those distractions and a loss of focus drove me to where I didn’t want to be.

Why does this matter and why does it resonate with today? A few years ago I was part of a branded restaurant group that needed to increase covers. We needed to adjust what we were doing to drive footfall and fill our large restaurants to meet operational needs and revenue. 

We introduced a set menu to add value to the offering, which was a change from the premium offering we were famed for. We went bold – a peak lunch and dinner offering – thinking it was bound to work. 

From there we had to adjust. As each week went by we could see the average transaction value slipping in the restaurants but we were getting some progress on covers, especially at peak times. In the months following we had to adapt our labour model and how we deployed our teams to come in line with the shift in demand. However, we had to protect and manage our overall labour percentage budget to make cost efficiencies.

To do that, we reviewed our deployment and how it played out during peak trading times. We then identified an opportunity to shave our costs further at preparation times and thought about outsourcing a lot of the main kitchen prep work to centralised kitchens. 

The team weren’t on board with our decisions as they felt the creativity and quality that made us brilliant would be compromised, something that had always made us stand out from competitors. Initially we didn’t get the team buy-in on the changes we were making and subsequently ended up losing some incredibly talented staff, which had a negative impact on the business. Our initial aim of driving covers resulted in us losing more.

Fast forward a few years and in the middle of the biggest crisis in our lifetime we’re all in a position where we need to change and adapt but are uncertain how to measure against an unknown expectation or reality.

In recent months I’ve found the transparency we’ve developed in the hospitality industry has helped many of us navigate through the maze of covid-19. I thought I’d share what I have learned.

– Take clear and confident steps and keep your team together as best you can. They are the essence of what makes your business great

– As things change, be open, honest and transparent with your teams. They understand more than you might give them credit for and are resilient

– You’ll have to make hard decisions. The more you communicate with your team, the more they will understand

– Invest in “tech that matters”. The landscape has changed dramatically and become more technology-centric than ever. Think about how you can engage and manage your teams safely, effectively and consistently while boosting customer confidence 

– The steps may change along the journey but your final destination is still your goal. Whatever that is, keep true to your core values and don’t lose sight of them in a panic

– Customers are visiting hospitality to treat themselves. Don’t focus on revenue, focus on customer experience. Safety is now on a par with great food and great service

– If you have done your homework you should be confident of how safe your restaurants are. Your customers rely on you, will feed off your confidence and positivity, and will almost certainly return if they feel safe and enjoy their experience

– Look after your talent pool. There will be a time when trade recovers. Nurture those internal and external candidates that are going to add value to your business in the future

I have learned a great deal during my journey in hospitality operations. I’ve experienced first hand the major flaws in branded restaurant businesses – even the best! Now I’m in tech, I understand even more the importance of talent and how technology can support the engagement of teams, not hinder them.
Dan Maimone is head of client services for Harri

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