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Morning Briefing for pub, restaurant and food wervice operators

Fri 21st Jul 2023 - Friday Opinion
Subjects: What McDonald’s me-too moment meansdigitisation and the dowager duchess, leadership lessons from Lasso, challenging times for vegan restaurants
Authors: Mark Stretton, Katherine Doggrell, Ann Elliott, Glynn Davis

What McDonald’s me-too moment means by Mark Stretton

In terms of brand transformation, there are few organisations that have come as far as McDonald’s. 

Not so long ago, in an era of McJobs and Super-Size Me, the world’s biggest burger business was arguably synonymous with dead-end jobs and the sort of food that, in polite society, many would not admit to eating, and was considered really bad for you.

Today, in many ways, McDonald’s serves as the standard setter and quality barometer, beneath which no other hospitality business or food brand can operate – be it for food quality (at the price point) and value for money or restaurant standards, its sustainable and ethical supply chain, its dedication to training and development, or the continual work it does to better its people proposition.

In the current, ever-expanding era of responsible business, its work in sustainability and purpose, is impressive. It is clearly forging a leadership position, and its dedicated Plan for Change website is worth a visit for anyone in hospitality and leisure,with more than a passing interest in these issues.

All this said, some of the hard-won reputational sheen came off this week when an investigation by the BBC revealed some deeply troubling allegations around the experiences of UK workers. More than 100 current and recent employees (many of whom worked at franchisee-operated stores) complained of sexual assault, harassment, racism and bullying. 

It would have been easy for McDonald’s to lean into the complexities of the franchise model to absolve it of any wrongdoing in response. The business should be commended for not taking this route. However, given that few companies have been better at distilling processes, and simplifying operations (on a journey to creating a world-dominating franchise system), some consumers may ask why the same care hasn’t been taken for its workforce. 

It is clearly a complex issue, and what matters is how McDonald’s reacted. Faced with this damning evidence, the business took control of the narrative. From the outset, it demonstrated how seriously it took the allegations, acknowledged the veracity of some of the claims and apologised. 

Visibly led by UK chief executive Alistair Macrow, the business quickly set out its corporate position: zero tolerance for the alleged behaviour. It spoke about carrying out a full investigation with the strongest possible consequences for anybody found guilty of wrongdoing. It also demonstrated measures already put in place to create a safe and respectful workplace.

Of course, in reality, the only way to deliver meaningful change in the scenario whereby part of a brand is run or delivered via a franchising system is to make zero tolerance a necessary and measurable non-negotiable of the relationship. 

For now, its fast and sure response to this point has given McDonald’s time to investigate, take action and, eventually, move on – and this is critical, not just for the brand but for the wider hospitality sector too. The whole industry is moving (and has to move) towards the issues, although progress arguably feels slow. 

As hospitality faces into ongoing workforce challenges, amid a widespread desire to see the perceptions of careers elevated, this story must not be allowed to pass without all operators taking stock of where they are on the issues raised. They should also take the opportunity to clearly communicate, or reinforce, to their employees an unwavering commitment to safeguarding people, and to delivering safe workplaces. 

In an industry employing millions of people of all ages; where many work odd or long hours, late at night, in small teams and in entrepreneurial companies; in “social” settings like bars and restaurants; with high staff turnover rates, and therefore constant training required; the industry should not kid itself that what happened this week was necessarily just a company specific, or isolated instance. 

It is a good time for the industry to get on the front foot, to demonstrate it is doing everything in its power to stamp out unacceptable and toxic behaviour, and to deliver a progressive, warm and inclusive industry,where everyone is welcome. 

Aligning to the issues positively is powerful. There are some great initiatives out there such as #ItStopsWithMe, supported by a clutch of blue-chip brands including Aldi, Budweiser, Deliveroo and Nestle. 

For some, it may seem crass to discuss anything other than the deeply concerning personal impact that these alleged abuses at McDonald’s will have had on many young people. However, through the lens of a corporate perspective, it’s important to frame these issues in the era of “responsible business” in which all brands and businesses now operate. 

Consumers increasingly judge companies not just on the brand they’ve built or service they provide, but also how they look after and grow their people, how they imbed in communities and what they’re doing to unwind the climate crisis. It’s about how brands and businesses show up in society. 

Many hospitality and leisure businesses are accelerating their work in these areas. However, this week clearly represents another important moment for management teams in this industry to take stock; to reflect, reassess and react to the important issues raised. Business leaders understand the imperative nature of delivering a safe workplace for all; the challenge is ensuring it happens across every shift and for every colleague, in a complex, dynamic and ever-changing industry. The key question has to be: is every business doing enough?
Mark Stretton is a former Sunday Times journalist and chief executive of leading strategic communications agency Fleet Street

Digitisation and the dowager duchess by Katherine Doggrell

A traditional luxury hotel is like a vintage dowager duchess. Classic, impeccably dressed and deeply of their time. They operate very much in the belief that theirs is the correct way, indeed, the only way. There can be no change, why would you even suggest it?

And do they have a point? They certainly have their fans – those who look to them for guidance for the definitive truth on how things are meant to be done, the only proper way. Damask with sharp corners features deeply.

There is no need for modification. Their popularity, particularly around afternoon teatime, attests to this. They have honed their look and their ethos, and anything else simply isn’t up to snuff. Anything new is to be treated not with contempt – that would be uncouth – but as a passing fad, a whimsy, a gentle amusement to smile at and pass on by.

Help? You want to offer them help? That won’t be required, thank you. What they do is perfection itself. One cannot, after all, gild the lily, no matter how frail Lily may be getting.

And it is this resistance to change that many in the hotel sector are trying, gently, to overcome. There can be no doubt that the grand luxury hotels have their place and, at the very peak, where pink gins and silk cloths served by swarms of flunkies ankle-deep are the standard, there is no need for change. Guests would be as offended as a cucumber sandwich with the crusts left on.

But these luxury hotels are in count-them-on-one-hand territory. For the rest of the segment, for which money is only an occasional shadow of concern, the dowager duchess is quaint, but no longer the epitome of luxury.

For them, luxury is not the marble sink with a gold tap. It is not the fixtures and fittings, it is the experience – a word that is now riddling the hotel sector and sticking in the craw of the duchess like so many fish bones, but a requirement nonetheless.

The definition of a luxury experience has shifted significantly in recent years and is in danger of leaving the dowager befuddled and in need of a new Debrett’s. The guest wants to be recognised, Cheers-like. They want everybody to know their name.

And not just their name – their favoured type of wine, when they like to drink it, when their flight gets in, how many times they’ve stayed in the past, which tennis coach their kids preferred, their flipper size for snorkelling and the exact minute of sunset for that pink gin. The dowager duchess knows all these things, of course, but they are limited in number. Far better to have this information where even the work experience person can access it.

Convincing the dowager that they need help from technology is, of course, as challenging as teaching them a dance on TikTok. It’s a fad, it won’t last and, crucially, it’s not how it’s done. It’s tacky, it’s not luxury.

It doesn’t have to be that way. Deployed well, technology can free up those flunkies (we now call them team members) away from the grind of filling in your details at check-in and performing other tedious admin duties, so that they can focus on looking up from their desks and delivering on the service part of the stay.

It can build lines of communication the way the guest wants, not the way the hotel wants. Using messaging might cause gasps from the dowager, but it’s how we all communicate. And, as a bonus, hotels that use it for ordering have found that guests are more likely to spend more when they order using their phones as it allows for a certain anonymity when ordering extra chips, avoiding concerns over raised eyebrows at reception.

That same receptionist can also stand to have their day made slightly more gripping by not having to answer the same questions about the timing of breakfast and the availability of extra pillows. Hotel technology platforms have been using artificial intelligence for much longer than the recent burst of enthusiasm for ChatGPT and have honed it so that it can answer simple questions without the guest suspecting that they are conversing with a speak ’n’ spell.

This lack of tedium is a welcome break in a sector that is not the first or 15th choice for many people looking for employment, who are also looking for those memorable life experiences.

Technology became more acceptable in the hotel sector during the pandemic, when a healthy distance was preferred. The luxury segment is learning to think of it less like something from Terminator and more like a discreet personal alarm around the wrist. It needn’t ruin your look, but it might just save your life one day.
Katherine Doggrell is Propel’s editorial advisor and founder of NewDog PR. This article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription.

Leadership lessons from Lasso by Ann Elliott

If I’m feeling up to it, which is more not than often, I get up at 6am and exercise at home. Nothing too hard or strenuous, and nothing that really distracts me from watching TV at the same time. I am not exactly putting my back into it if I am really honest with myself, but it feels like a positive start to the day.

The TV part is really critical because that motives me more than the weights and yoga do. The programme I “watch” has to be 40 minutes long, include quite a lot of speech because I can’t always see the laptop screen, and has to be so engrossing that I absolutely want to watch the next episode. It also stops the routine of doing emails first thing in the morning and the thought, “I’ll only do them for an hour and then exercise”. That has never worked, and it’s never a positive start to any day.

I’ve watched Bosch, Normal People, The Bear, Queer Eye, Bridgerton, The Diplomat, Lupin, Slow Horses and many others in this manner, which is a bit of a shame to be honest as I’ve missed quite a bit of dialogue and much of the action in some of the best TV series.

Now I’m exercising at 6am in the morning with one eye on Ted Lasso. In fact, doing rather more watching than exercising, if truth be told. You can’t be doing “downward dog” and take it all in. It’s one of those programmes where you have to focus because there’s so much going on underneath the surface. It’s really a programme about leadership cleverly disguised as a gentle sitcom.

I did google “Leadership lessons from Ted Lasso”, and there were many articles on the subject, including one from Forbes. They have, of course, very common themes. This, from the NeuroLeadership institute, summarised it perfectly for me.

“Traditionally, leaders are expected to have all the answers and tell employees what to do. But Ted isn’t that kind of leader. He builds a culture of trust and support, and his actions demonstrate how much he values relatedness, teamwork and helping people achieve their potential.

“He cares about empowering people to be the best versions of themselves…he recognises that his role as a leader is to create an environment where team members can experiment, collaborate and perform at their best, thereby increasing the entire team’s performance.”

As Ted himself says: “If you care about someone, and you’ve got a little love in your heart, there ain’t nothing you can’t get through together.”

I was thinking about Ted Lasso and leadership when I met Paula MacKenzie, the chief executive of PizzaExpress, earlier this week for a coffee in its Soho restaurant. She knew everyone who worked in the restaurant and she connected with them all in a very personal, warm and sincere way when they came in to start work. She was extremely engaging, curious and interested – someone you would want to work for, and with.

Of course, there are many different leadership styles, and not all of them focus on a people-first strategy. Indeed, I have worked for a number of very bright, very strategic and very intellectual leaders who were relatively successful without necessarily seeing their people as critical to their success, or the success of their business.

In my experience though, the very best leaders – and I think Paula is one – are very clear on their ambitions, create the optimal team structure to deliver their goals, recruit and motivate staff to deliver their very best and communicate brilliantly across and through the business.

Having not been to PizzaExpress for a while, I took my family to eat there this week to see if Paula’s leadership style had permeated down to store level. It has – the teams were welcoming, happy, smiley and delightful. In hospitality, our people are our brands.

They certainly had a PizzaExpress way about them, which was great to experience. This has come from the top, from great leadership. I now have to wait until the end of season three to see if the same can be said about Ted Lasso!
Ann Elliott (she/her) is a portfolio non-executive director and board advisor

Challenging times for vegan restaurants by Glynn Davis

Enjoying a very enjoyable dinner at the recently opened vegan restaurant Studio Gauthier in central London, you would think all was hunky-dory in the world of plant-based dining. But this is far from the case – there is trouble in the undergrowth.
For Alexis Gauthier, this is the latest addition to his animal-free establishments and sits alongside his Michelin-star flagship Gauthier Soho and 123V restaurant within Fenwick’s department store in New Bond Street. Since becoming vegan in 2015 and gradually adding plant-based dishes on to the Soho menu, he made the switch to a fully vegan proposition in 2021 and arguably now runs the most acclaimed animal-free restaurant in the UK.
Within his airy new place in Fitzrovia, he has brought in dishes from his high-end Soho venue and more affordable 123V outlet, which represent many years of cooking expertise. He’s basically applied his classical French training to vegetables, and it has worked. He’s created food that is attractive and tasty to all diners. What he says is different about cooking vegan food is that there is no playbook to call on. There is no Escoffier manual to build on in quite the same way as with protein-based dishes. Building from first principles is more of a requirement with plant-based cuisine.
This complication, combined with rising ingredient costs, is undoubtedly contributing to the difficulties of the vegan category. Diners are a lot less forgiving on the quality perspective during a cost-of-living crisis, and also want to feel they have some value on the plate. It is not as easy to quantify as it is with a piece of meat or fish.
Among the casualties has been Stem & Glory, which has recently been bought by its founder in a pre-pack administration for a mere £15,000. The deal involves one site continuing to operate in Cambridge, while its two London outlets have been closed, and the administrators reported net assets of minus £381,000 after two crowdfunding rounds raised a combined £1m.  
This follows burger chain Vurger Co, which was also bought out of administration by its founders following the closure of one of its restaurants, while the three remaining sites continue to trade. Maybe the experience of Honest Burgers should be telling because its vegan-only restaurant, V Honest, closed shortly after its opening last year, with management preferring to incorporate decent meat-free options on to its regular restaurant’s offerings.
Looking to upend this thinking is Neat Burger, which recently raised $14.5m to fund its expansion of outlets selling burgers made from its own pea-based protein meat substitute, which has apparently gone down well with consumers. But like Gauthier, Zack Bishti, founder of Neat Burger, puts the failures in the market, and waning interest in plant-based foods, down to poor quality products.
“Every big company in the game had some sort of board meeting and they were like ‘okay, right, we need to go big on plant-based’. They just launched 1,001 products, and I think consumers saw fatigue,” says Bishti.
If there is insufficient skill and differentiation being used, then there will inevitably be victims in today’s increasingly tough marketplace. One investor in the sector cuttingly suggested many companies had “sort of reinvented the bean burger, and there’s no economic moat behind bean burger making”. 
While all this uncertainty about the viability of purely vegan restaurants and plant-based creations sitting on the supermarket shelves reverberates around the sector, there is the other killer fact to be considered. Although veganism is growing – especially among the younger generation – with growth of 40%, according to research from Finder, this still equates to a paltry 3% of the population. In contrast, around 95% of the population eats poultry, according to the British Poultry Council, and tend to do so at least twice a week.
As it stands right now, the tough economic situation, combined with these hard statistics, suggests mainstream vegan restaurants will continue to have a challenging time, whereas destination-type venues with more unique, stand-out offerings will find it easier to carve out a place appealing to both the (currently niche) group of vegans, as well as the rest of the country’s dining population.
Glynn Davis is a leading commentator on retail trends

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