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Morning Briefing Strap Line
Fri 9th Sep 2022 - Friday Opinion
Subjects: Is prime minister Liz Truss a libertarian, staying ahead of the game, still opening for business 
Authors: Paul Chase, Glynn Davis, Sarah Travell

Is prime minister Liz Truss a libertarian by Paul Chase

Having witnessed some of the awful speeches and car-crash interviews given by our new prime minister in recent times, I looked forward with a sense of sadistic glee to her first outing at Prime Minister’s Questions last Wednesday. But she surprised me. It was a feisty and hard-hitting performance in which she more than held her own. Regardless of whether you share her politics, she had her back bench troops roaring her on, and without recourse to the anarchic, scatological oratory of her predecessor.

It seems debating ideology is where she feels most confident, and this PMQs was a pure ideological clash, with Starmer wanting to bash energy giants with a windfall tax and Truss defending profits as the source of future investment and growth. I voted remain in the referendum, as did Truss, but I have long thought that if there were any benefit to Brexit, it would require a complete remodelling of the British state, and of UK plc, to reap them. So, is Truss a small-state, free marketeer who will deliver this radical change, or will she be just another mediocre prime minister managing our decline?

Well, if you want a low-tax, small state, you don’t start off with a pledge to spend £150bn keeping household energy prices down for two years – with a much smaller pledge for businesses of six months help, and then we’ll see. But these are extraordinary times, and half of all Tory voters in a recent poll said they want the energy companies nationalised. If any of them knew whether they meant the energy producers, which are massive global companies, or the domestic energy retailers is unclear. But what is clear is the underlying sentiment. People want the state to step in and save them from crises – small-state Conservatism is a hard sell at the moment.

Our rapidly ageing population, record levels of spending on the NHS and pensions make tax cuts difficult, and pensioners, most of whom vote Tory, are the only demographic guaranteed an inflation level pay rise next April. So, is Truss a libertarian? In her younger days, she was a member of various small state think tanks, and Chris Snowdon, director of lifestyle economics at the Institute of Economic Affairs, describes her as “my mate”. 

Certainly, her choice of Therese Coffey as health secretary seems like an inspired appointment if you are opposed to the nanny state. Images posted on social media of Coffey with a glass of wine in one hand and a large cigar in the other, with a stain down the front of her t-shirt, caused former Tory chancellor Ken Clarke to tweet there were rumours Coffey was Ken Clarke in drag making a political comeback! Coffey is also Liz’s mate, and in addition to being appointed to health, she’s the deputy prime minister. Well, at least we should feel confident she won’t introduce minimum unit pricing. 

Throughout her think tank days, Truss took aim at the growing culture of entitlement among the middle-class. One of her more influential reports called for the abolition of the unconditional winter fuel payment for pensioners – many of whom are now property millionaires. Ah, the irony! Truss has long opposed Britain’s outdated planning laws, which would make it much easier to build homes and energy infrastructure. But these ideas are toxic to may Tory backbenchers whose voters – high on inflated house prices – will punish them for greenlighting the smallest development.

It doesn’t help that since the pandemic, voters seem to believe the state can solve all their problems. “Why doesn’t the government just make everything free?” may seem like a ridiculous notion, but coming up with whopping sums of money whenever there’s a crisis encourages this belief that the Big State will always run to our rescue. My own view is that capping everyone’s energy bills is a mistake. Help needs to be targeted on the poor and vulnerable. Middle class welfare is being put before help to small and medium-sized businesses. 

A six-month energy cap followed by targeted help for at-risk industries – including hospitality – doesn’t provide certainty or the ability to plan, and I fear many small pubs and restaurants may now go to the wall. This country is mired in difficulty not just because of current energy price hikes, but because it is in thrall to too many vested interests. Will Truss take them on and truly move the country in a radical, enterprise-friendly, aspirational direction, or will she find herself overwhelmed by current problems? As Harold MacMillan once lamented: “Events, dear boy, events.”
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

Staying ahead of the game by Glynn Davis

Inamo restaurant in Covent Garden is about to launch its new touchscreen tables that will not only enable customers to order from a vibrant interactive menu, but also offer up an array of games including space invaders, air hockey and pool that can be played individually, or among the various members around the table.

This is a major step forward for the group that opened its first restaurant 14 years ago in Soho, and to date, has relied on ceiling-mounted projectors fixed above each table along with rudimentary interactive technology, very basic gameplay and separate tablets for placing food and drink orders. Noel Hunwick, co-founder of Inamo Restaurants, says the new set up is effectively what the company envisaged when it launched the concept all those years back. It was simply way ahead of its time, in the pre-smartphone days, before the development of incredible touchscreen technologies. 

With impressive full table technology now in place at Covent Garden – and soon to be introduced into its original Soho restaurant – Hunwick recognises the company is well placed to further tap into the growing demand for experiential leisure and hospitality. The screens and games have, of course, always been a core part of the Inamo offer, and Hunwick has been keen for customers to choose how much or how little they interact with the games while they dine. They could simply have a meal with zero gameplay.

This strikes me as a sensible balance and differentiates the Inamo model to a growing number of experiential hospitality offers that have been hitting the market at a ferocious rate over recent years. We’ve seen the launch of an array of concepts built around the likes of darts, crazy golf, trampolines, shuffleboard, ping pong, clay pigeon shooting, axe throwing and F1 simulations. They are all based on the simple premise of drawing in customers through dazzling gameplay and then flogging them as much food and beverage as possible. Many of these businesses have benefited from an availability of large spaces in town centres and shopping malls vacated by large retailers, and landlords desperately trying to fill them. The experiential leisure model has been a solution ideally suited to these distressed assets.

My worry with many of these businesses is that they could simply be short-term trends and fads. Upon opening, they invariably achieve success, but then interest wanes and people move onto the next new thing or, in an increasingly competitive marketplace, go to a rival’s (cheaper or newer) venue. Such is the high capital expenditure required by many of these businesses that they will be reliant on repeat visits, and I’m doubtful about the likelihood of this happening with many of these propositions. There is a risk that they are quite one-dimensional in their gameplay, despite the best efforts of the operators to leverage some variety in the offer.

Where there absolutely appears to be some longevity among the myriad concepts launching is those involving darts. Red Engine’s Flight Club has been enjoying great success and is about to open its largest UK site yet, in Cardiff. It has been followed by the likes of Oche, and highlighting how the darts-based model looks to have gone thoroughly mainstream is the recent launch by Mitchells & Butlers of its “interactive darts experience”, Arrowsmiths, within one of its sites in the West Midlands. It is looking to roll it out to further pubs. Shuffleboard has also enjoyed some traction with openings of Red Engine’s Electric Shuffle, and outlets by various other operators. 

What seems to be a perfect fit in the experiential space are games that traditionally have links to food and beverage, and the pub in particular. While the explosion in capex-heavy new concepts continues apace, maybe the pubcos should go on the offensive and simply add back in many of the things they have taken out of their outlets over the years. Let’s see dartboards make a return alongside shove ha’penny (the granddaddy of today’s shuffleboard), pool tables and bar billiards, whose tables take up very little space. While we are at it, maybe we should have some sort of return of the crazily flashing fruit machine, but maybe that could be a step too far.
Glynn Davis is a leading commentator on retail trends

Still opening for business by Sarah Travell

“Certainty is the catalyst that turns attitudes into action.” So said Zakary Tormala, a psychologist and associate professor of marketing in the Graduate School of Business at Stanford University in the US. 

At the moment, certainty for businesses in the UK hospitality sector is an elusive commodity, especially when it comes to dealing with the growing issues of utility costs. Hopefully, a new prime minister and cabinet will bring some clarity to the market sooner rather than later. The slight uptick in the share prices of the majority of the sector’s listed companies on those appointments highlights the positive impact that has already had in this respect.

The Propel Premium database of multi-site companies, in association with Virgate, has now grown to include 2,617 companies, operating 66,609 sites. An additional 47 companies, which operate 293 sites between them, were added during August 2022. It again highlights the breadth of those looking to enter and grow in the market, and if the sector secures clarity and support from the new government, there are those in position and ready to take further market share. This is something we are clearly seeing with our own clients, despite the doom and gloom of all the headlines.

Perusing the database this month, it is encouraging to see that London remains an attractive proposition for fledgling businesses. Clement Ogbonnaya is the operator of the Prince of Peckham and will open Queen of the South, in Tulse Hill, later this year. Ogbonnaya plans to follow this with five more openings through a new pub group he has created, called The Village People. 

Meanwhile, Maguro Group, founded by Jae Cho, operates five sites across London. The business is set to debut its new casual Korean BBQ concept, Pochawa Grill, in London’s Chinatown. Inspired by Pocha – a shortened version of Pojangmacha, which refers to a Korean street food stall or restaurant on wheels – it will open at 29 Wardour Street later this year. The 1,670 square-foot venue will “champion Korean culture in food, drink, and music” and have space for 50 covers. 

Also in the capital is neighbourhood store concept Nourished Communities, which was co-founded by Rollo Millership, and which opened its debut site in Canonbury Road, north London, during the pandemic in order to support producers that relied on farmers’ markets. The business has now opened a second site, at 183 Blackstock Road, in Highbury. The new store, which grows its own mushrooms and makes its own honey on site, also offers local vegetable box deliveries. It also sells seasonal produce grown in Kent, and once it has the necessary licence, will offer cider and refillable wine bottles.

Thankfully, this optimism is not confined to the capital. Mr Souvlaki is a Greek street food restaurant concept owned by Ilias Alexeas. The company operates sites in Banbury and Leamington Spa and is opening a third site, at 38 Clarence Street, in Cheltenham. Alexeas said: “It’s the shop I always dreamed of. When I first visited Cheltenham, I knew it was the perfect place for us. We just want to spread some Greek tastes, tradition and warm hospitality to each and every customer by offering a truly authentic eating experience.” 

Over in Wales, MT Hospitality, which is co-owned by Ollie Moore and Matt Thomas, operates food and live music venue, The Perch, on Swansea’s Wind Street. The business has now opened two additional venues, which are part of The Perch Group, recently opening a second site, SIX Swansea, in Princess Way, followed by the opening of The Dark Horse in Mumbles. 

In Nottingham, brothers Sam and Tom Benjamin are the co-owners of The Taphouse and Another? Wine Bar (this is not a typo!) and have taken the lease on 6 Richmond House, Hurts Yard, with a view to creating a high-end cocktail bar and fine dining restaurant. The property is currently being fitted out and will have room for 69 covers over two floors, which will open in two phases.

Overall, it’s a good month for pubs in the database, with New Dawn Pubs, founded by Mark Robson, Mark Williams, Julian Clarke and Julie Phipps (founders of Red Mist Leisure back in 2004) who, having completed on the sale of the 11-strong Red Mist Leisure to Red Lion Holdings at the beginning of July, subsequently securing four of their former pubs. These comprise The Red Lion in Odiham, The Royal Exchange in Lindford, The Rose & Crown in Upper Farringdon in Hampshire and The Castle Inn in Farnham, Surrey. The business has since exchanged on a further, yet-to-be-named “iconic” pub near Guildford, Surrey. The new pub will receive a substantial refurbishment prior to reopening in early next year as part of their new collection. The company said plans have also been set in motion for investment at the existing sites, the first of which will be The Castle in Farnham. 

It’s a similar story over at Pubs Limited, the brainchild of Jerry Brunning, co-founder of Brunning & Price. The company is a circa 80-strong pub business now owned by The Restaurant Group. The company’s portfolio consists of The Swan at Marbury, The Black Bear in Whitchurch, The Hare in Farndon and the recently opened The Henry Potts in Watergate Street, Chester. 

The sector is about to face one of its most challenging periods, but as you can see from the examples above, that still hasn’t put off some chasing their dreams of making a mark in the industry. Let’s hope some further clarity and support over the coming months will allow many others to do the same. 
Sarah Travell is the founder and chief executive of Virgate, sponsor of the Propel Multi-Site Database. The database is one of the benefits Premium subscribers receive. The go-to database provides company names, the people in charge, how many sites each firm operates, its trading name and its registered name at Companies House if different. Companies can have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email jo.charity@propelinfo.com to upgrade your subscription.

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