Subjects: It’s story time, the tech-led drive for delivery, no experience necessary, restaurants and leisure – building anew
Authors: Paul Chase, Glynn Davis, Abi Dunn, Rupert Bentley Smith
It’s story time by Paul Chase
Most people have neither the time nor the inclination to study history or politics. Insofar as external events impinge on their consciousness at all, they do so in a manner that has, at best, a loose association with the truth. What happens is people formulate stories in their heads about significant events that help make sense out of them. What kind of story people formulate depends, crucially, on how the story ends. If it has a happy ending, the public are inclined to take a benevolent view of the motives and actions of the main players. If it has an unhappy ending then things turn nasty – finger pointing, a blame game and imputing bad faith and dark motives to the actors are all likely to ensue.
So, events like the war in Iraq, the recent riot at the Capitol in Washington DC, and the covid-19 pandemic are all events that people will have formulated a story about. But not always the same story. Increasingly, the stories people tell themselves and others are dominated by tribalism, with all the deep, atavistic emotions that inspires. Political leaders naturally try to capture the narrative to ensure their version of the story is the one that predominates.
By way of example, the war in Iraq was a foreign policy disaster. But if the Americans had the same level of brainpower as they had firepower and had handled the occupation differently – pacifying the population, sealing the borders, successfully setting up a functioning democracy – then no one would be banging on about WMD and whether Blair took us to war on a lie. Ends justify means and the dividing line between hero and villain is a narrow one indeed.
So, how the covid-19 pandemic ends will be crucial to determining the story the public formulates about it in their heads. In the UK, I would suggest there are three crucial stages to this: firstly, the vaccine rollout. Thus far, this has been a sparkling success. The government understandably wants to focus the public’s attention on this to create the happy ending they hope will obscure so much that went wrong beforehand.
But a successful rollout of the vaccines will not be enough on its own. The second element of a happy ending is the roadmap to coming out of lockdown, reopening the economy and society. The prime minister will be setting this out on Monday (22 February), although the general outline has already been extensively leaked. The third element will be the chancellor’s Budget on 3 March.
Delivering 15 million jabs in 69 days is a logistical feat of epic proportions, but the public wants to see that achievement deliver a benefit in terms of opening up society. I feel some sympathy for the government because, in so many ways, it is damned if it does and damned if it doesn’t. Releasing from lockdown is a process fraught with political danger for the government. It will be criticised by some for relaxing restrictions too quickly, by others for not doing so quickly enough.
And here, storytelling becomes part of what the government is telling itself. Despite all known facts to the contrary, the government appears deeply suspicious of the role that alcohol-licensed premises have in spreading the virus. They ponder false trade-offs between opening schools and opening pubs. The real fear is they think public opinion will automatically associate any resurgence of infection with allowing people to take a disinhibiting drug like alcohol. “Should Boris have reopened the pubs?” is a headline that’s easy to imagine if a new variant emerges. This is why we will see the government take a precautionary approach to lifting lockdown restrictions.
The final stage of creating the happy ending is the chancellor’s Budget. Before World War II, the Budget was a simple statement of what the government anticipated its spending and receipts would be for the year ahead. Now it is used as an instrument of fiscal policy. Consensus seems to be the chancellor will not increase taxes yet. To do so would strangle the recovery and end the prospect of establishing the happy ending narrative the government so badly wants.
It is probable the chancellor will announce further support for businesses – spending yet more central bank-created money. Many in hospitality would welcome it and understandably so. But unwinding the huge expansion of credit we’ve seen over the past ten months is a task that gets more difficult the longer you put it off. Inflation is, by definition, increasing the units of money needed to facilitate the same number of transactions. And there are time lags involved. An expansion of broad money manifests itself either as asset price inflation or retail price inflation – usually 12 to 18 months later. So, if the chancellor raises taxes in next year’s Budget, it will be too late to stop a demand-push inflation happening because it will have been baked-in by inaction this year.
Again, for the chancellor, it’s a case of damned if he does, damned if he doesn’t. What a time to be in government. Jeremy Corbyn must be thanking his lucky stars that he lost the last election.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health
The tech-led drive for delivery by Glynn Davis
Incredible as it sounds half the world’s internet users aged 16 to 64 have placed an order for takeaway food for delivery in the past month, according to Hootsuite and We Are Social. I’m certainly one of them and I don’t know anybody who isn’t. Maybe this statistic is not too surprising really because the hospitality industry around the globe has been almost totally reliant on takeaway and delivery for its survival over, pretty much, a full year.
It has been so long since we’ve been able to simply walk into a restaurant or other dining venue that it is almost as if consumers have forgotten about this experience. Lifestyles have adapted under covid-19. It’s easy to begin to overlook the fact the vast bulk of the hospitality industry’s revenues are normally derived from people actually sitting in venues with a knife and fork in their hands. It’s not been about people sitting at home with takeaway cartons.
Yes, food delivery was growing at a terrific rate and had become a meaningful part of the sector but it was never going to replace the dining-out experience and become the dominant force that it has during covid-19. It has clearly only become so prominent because of unprecedented circumstances. It will certainly not replace the old dining-in model. Eating out will return “big time” and delivery volumes will drop accordingly because consumers only have so much disposable income to allocate.
Try telling that to the many serious investors and start-up businesses that are entering the market to take advantage of the present growth in takeaway and delivery. The most interesting element of the market involves ghost kitchens that were originally developed by Deliveroo with its RooBox (renamed Editions) kitchens. These were originally designed as shared kitchens built into old shipping containers for branded restaurants to use in locations where they did not have a physical presence.
In these frenetic times, this rather sensible model has been jumped upon by the likes of Curb, Karma Kitchen, Taster, Foodomnia and others entering the market. As activity has increased, the model has been stretched to include thousands of virtual, delivery-only brands. But it is in the US where things are being taken to the extreme as the land-grab for takeaway meals is picking up pace.
Among the players are Kitchen United (investors include Google Ventures), CloudKitchens (backed by Uber co-founder Travis Kalanick) and car park operator Reef Technology (which recently raised $700m from Softbank and other investors) that has ghost kitchens parked on some of its 4,500 sites. These businesses contributed to the 11% rise in money invested in such kitchens in 2020 in the US, hitting the $3bn mark.
This area continues to attract great interest from technology investors who seem to be taking food brands (virtual or otherwise) ever further away from the actual food itself and stripping out all hints of hospitality. Consider that one ghost kitchen operator – Mealco – simply requires the chef to initially create the dishes. It then sources the ingredients and farms out production to its dispersed kitchen network. Its founder acknowledges that if the chef wants to be in the kitchen every morning then Mealco is not for them.
I suspect Asia-based JustKitchen is also not for them. It regards food as a “content play, with recipes and branding instead of music or shows as the content”. Ingredients are prepped in a hub kitchen before final assembly and delivery at spoke kitchens. But if this wasn’t enough of a commoditising of the process, the company plans to outsource/license some of its spoke kitchen activity to other food vendors and manufacturers. It will then focus on order management software and recipe content – no doubt to the great comfort of the technology entrepreneurs involved and its investors who can wash their hands of all that messy food handling.
Amid this tech-led frenzy of activity, I’m hoping we can take some comfort from the National Restaurant Association findings in the US that found 72% of people believe it is important delivery orders of food come from a location that they can actually visit in person – ie, a restaurant.
This will hopefully ensure that when the real-world bricks and mortar restaurants open up again, they will be used just like before covid-19 – for both takeaway orders and the much-missed dine-in experience. Only then will the real test come for the numerous opportunistic tech-led, virtual hospitality creations that are currently flooding the market.
Glynn Davis is a leading commentator on retail trends
No experience necessary by Abi Dunn
Ann Elliot’s article in last week’s Friday Opinion got me thinking about our next battle in hospitality. This potential crisis has been bubbling for years now – it’s one we’ve always known was on the horizon, but has been put on the back burner again these past 12 months while we concentrated on survival. With the light finally glimmering at the end of the tunnel, it’s time to act. Not only on a strategic level with our hospitality bodies, but also individually with our general managers (arguably those who will be facing this battle head-on).
So, any clues as to what we’re talking about? You got it – it’s people.
Hospitality in the UK is already burdened with the perception of being a “student job”, and the impact of lockdown certainly hasn’t helped. With one fifth of the hospitality staff members losing their jobs last year and, potentially, many more to come, it’s reasonable to believe those people may look into “more secure” sectors. This is reflected in our conversations with job hunters at Sixty Eight People.
Strategically, we must act fast. Realistically, attracting thousands into the industry will involve changing the perception of hospitality careers. I admit this is a momentous task and one that may well take years. I’m not naive enough to think we can click our fingers and the talent will come running.
But what can we do to take action now? This week, next week, today? It’s estimated up to 40% of furloughed employees may not return to their same place of work – so I have no doubt recruitment agencies such as my own will have a busy next few weeks.
Considering all this, I present an idea. Just one idea, conjured up during just one of my many sleepless nights (thanks a lot, 2020).
#noexperiencenecessary – a front-line initiative to encourage our managers at site level to look beyond a CV, beyond previous training, beyond skill level. To seek out behaviour. It will take a leap of faith and it will take quality interview training. Most of all, it will take general managers having confidence in their ability to “create” superstars rather than just hiring the finished article.
I know I’m not the only one to see so many hourly paid adverts that insist on “cocktail experience”, or “two years’ hospitality experience”. Don’t get me wrong, I do understand why. Venues have a gap to fill and not needing to factor in the training time can be a big advantage – previous experience is perceived to be a safe bet. I’d argue this perception needs to change. The best businesses are continuously meeting people, getting the right personality fit and creating talent banks. Panic recruiting simply does not work.
Chloe isn’t your best bartender because she makes the drink any better than anyone else. She’s your best bartender because she is hard working, resilient, creative and great at building relationships. Josh isn’t your best server because he joined your business knowing what he was doing. He’s the best because he has initiative, a thirst for knowledge and empathy. All these behaviours exist in other sectors. Therefore, when we ask for existing experience and overlook great candidates wishing to start out in the sector, we miss out.
Speaking plainly, we simply don’t have that luxury anymore. OK? On board? Let’s see how we do this.
It starts with meeting people we wouldn’t usually meet. Seeing beyond a CV. We need to perfect our interviewing technique so we’re able to glean behavioural traits and predict future performance. It’s been proven that if a candidate was a high performer in a previous role, irrelevant of sector, they’re likely to perform well. Need resilience, positivity and kindness? Focus your interviews on discovering whether your candidates can evidence these competencies in a previous job, their education, or even their personal life.
Perhaps this style of hiring would mean dropping the traditional “trial shift” – something I’ve fallen in and out of love with now for years. But does a trial even help? Interestingly, Andrew O’Callaghan from Dishoom confirmed: “We dropped our trial shifts. We simply couldn’t find a correlation between them and length of service.”
As with anything, there are pros and cons.
• We open our minds to great talent from other sectors
• We perfect our interview technique
• We “home-grow” our superstars, training them our way
• We reap the rewards of rebuilding our sector through innovative recruitment
• New recruits may take longer to reach “break even” – where they start to add value to our operations
• Training needs to deliver – it must be robust, structured and continuous
• With this new level of investment, it’s imperative we retain people, so reviewing all factors may be essential (working hours, pay, benefits, working conditions)
So there you have it – this crusader’s one idea. Perhaps it might help us get off the ground when it comes to recruiting our reopening teams.
Every huge change is helped by individuals doing small things. Even if every general manager just recruited one person they wouldn’t have normally given a shot to – imagine that.
Abi Dunn is founder and chief of dream jobs at hospitality consultancy Sixty Eight People – www.sixtyeightpeople.com
Restaurants and leisure – building anew by Rupert Bentley Smith
Worst-case scenarios don’t come much more legitimate for restaurant and leisure businesses than repeated forced closure, for indefinite periods of time, with the outlook changing week to week, leaving very little scope for any strategic planning on how to reopen. Locked down and shut down, and without any clarity of what the trading environment will look like on the other side. It is impossible not to have sympathy for these operators when, for many, the tap of trade has been totally turned off.
No one can claim the past 12 months have been a good period for restaurants and leisure operators. It’s been an unquestionably brutal period in their history; totally unforeseeable and through no fault of their own. But what was also unforeseeable is the way in which many businesses reacted and this gives much to admire. It has been incredibly heartening to see the various ways in which they have adapted, perhaps in order to survive initially, but also in ways that will make them best placed to capitalise during more fruitful times ahead, and more durable if ever both arms are tied behind their backs again.
It was energising to see how good operators returned to trading levels of 75% in the periods between lockdowns, with trading figures and customer numbers restricted only by social distancing rather than any sign of diminished consumer demand. Operations were at capacity, both in terms of the space they could operate with and the hours that were afforded to them. Any space available was traded in a response to the restrictions that were put in place and we have seen since a number of permanent requirements for significantly larger units, also at a time when many landlords focused on how to repurpose some of their bigger spaces.
In the time they were closed, they had evidently worked incredibly hard to develop additional elements to their business that, in some cases, had never previously been a consideration; takeaway, delivery, sophisticated meal boxes delivered nationwide and retail enabling people to get restaurant quality at home. Additional income streams that are doing greater things than merely stopping businesses having to close for good.
We’ve heard stories of dark kitchens trading at numbers as strong as good high street restaurants and operators receiving data from online sales clearly demonstrating huge popularity in locations the owners had never previously contemplated. It’s valuable information that removes so much of the uncertainty when looking to expand and brings new towns and cities into focus.
We have seen some businesses make adaptations to create environments that are as conducive to working as they are to socialising as they look more intently at neighbourhood locations where they feel they can capitalise on the growth of people working from home or nearer to home, as a trend in the future.
In the short term, there’s definitely been an emphasis on requirements for fitted, or partially fitted, spaces that seek to keep initial investment as low as possible. Clearly, raising capital for expensive fit-outs is currently a huge challenge and this is likely to remain until confidence is restored and we are free of the tougher consequences and restrictions of covid 19.
However, a more positive impact we could see over time is the emerging view that restaurants and leisure businesses are, in fact, very good places to invest. Investors looking at this sector could feasibly form the opinion it is now actually a stronger and safer bet than they had previously considered. These businesses have faced the nadir of their existence and been forced to close through no operational fault of their own. But they have demonstrated incredible resilience along with the ability to adapt and, ultimately, emerged stronger and better versions of themselves; so surely there’s an argument the sector is a better place to invest than it ever has been. While it is impossible to answer questions linked to the likelihood of an event such as this repeating in the future, we do now know that it forces the best operators to only get better.
The reactive short-term trends and long-term adaptations will become clearer as we emerge from what we hope to be the final lockdown. Businesses have faced astonishing challenges that could not have been foreseen. But what we can now foresee is that we will be eating in better restaurants, getting better quality and more varied food delivered, and cooking with far greater sophistication at home; all thanks to the creativity and determination of a lot of inspirational and pioneering businesses, during their worst-case scenario.
Rupert Bentley Smith is a director at Bruce Gillingham Pollard