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Morning Briefing for pub, restaurant and food wervice operators

Fri 15th Dec 2023 - Friday Opinion
Subjects: Hospitality wrapped: a year in review, the importance of offering value this Christmas, Christmas rostering, the power of ‘Spoons
Authors: Kate Nicholls, Menashe Sadik, Alastair Scott, Phil Mellows

Hospitality wrapped: a year in review by Kate Nicholls

As we plough through the busy festive period, let’s take a moment to remind ourselves of the incredible value that our sector provides, even over and above the social, cultural and wellbeing benefits we bring.

Without our industry, there is no urban renewal and city centre renaissance. Without us, there is no jobs and skills-led recovery. Without us, there is no way to deliver jobs and investment in communities across the UK, with the fastest development and progression opportunities. 

So, while I feel a certain sense of déjà vu, reflecting on another year of unprecedented turbulence, it is with a sense of optimism that I look back on 2023 and ahead to 2024. Above all else, it is with a sense of pride that I reflect on how much worse the situation could have been but for the creativity, tenacity and hard work of all our members and the entire hospitality sector.

Our own work has ensured the sector’s voice is heard right at the top of government on matters such as tax, rail strikes, planning, business rates, energy, inflation, short term lets, visas and so much more. Together, we have continued to ensure hospitality remains front of mind, right at the very top of government. 

Our work is far more than just political engagement and campaigning, however. The UKHospitality team has also driven forwards a comprehensive programme of activity to collectively promote the reputation of the sector as an investor in people, places and the planet. 

We have launched a career starter apprenticeship into which we are building degrees, MBA apprenticeships and graduate training programmes. We worked with charity partners and government ministers on supported pathways to employment for older workers, vulnerable people and care leavers, as well as a new bootcamp pilot project with the first nationally accredited induction training programme.

The Hospitality Rising “Rise Fast, Work Young” campaign reached half of all 18 to 24-year-olds and has resulted in more than 150,000 job applications. Meanwhile, more than 700 companies signed up to both the Hoteliers Charter & Hospitality Wellbeing and Development Promise, something of which we are very proud.

Alongside Sky and the Zero Carbon Forum, our carbon calculator and net zero toolkit continues to help small businesses contribute to meeting our common commitments on carbon reduction, and we are working at pace on the challenges of the built environment by assisting government on reforms to the Landlord and Tenant Act. 

All of this work has been hugely important, and the positive impact of everything we’ve helped implement this year will only be more significant as an election beckons in 2024. This year, we have spent time actively engaging with Labour, the Lib Dems, the SNP and others, inputting into manifestos and helping to influence and shape policy, because every single parliamentary candidate needs to know the importance of hospitality. 

Our industry connects every person in the country, across every single constituency. We have, therefore, compiled a simple three-point plan to take to all candidates, to help us unleash our full potential. 

Firstly, there is growth – where a lower rate of VAT is key to boosting demand, helping overcome rising costs and preventing further price rises for consumers. Secondly, investment – we’re calling for a root-and-branch review of business rates, with a permanent lower rate multiplier for hospitality, leisure and tourism. Thirdly, jobs – as employers need encouragement and reward for investing in their people, to give them more control and flexibility over how funds are spent to support recruitment and development. 

We say that by supporting hospitality, government supports Britain. No other sector can deliver growth and investment as quickly as ours. We bring town and city centres to life, acting as a beacon for investment and creating places in which people want to live and work.  Our industry is growing six times faster than the national economy, adding £30bn to it annually. It creates and provides one in every six new jobs, invests £10bn a year in high street development, and generates £54bn a year in tax to fund vital public services. 

All of this amounts to a powerful, vivid demonstration of our core message – that hospitality is a substantive force for good, the beating heart of our communities, and a vital partner to address the concerns and challenges we face as a society. 
Kate Nicholls is chief executive of UKHospitality

The importance of offering value this Christmas by Menashe Sadik

Christmas is coming, but this year it’s going to be a tough one for consumers. The country is still gripped by the cost-of-living crisis and all the things that go along with it, and our customers will be thinking long and hard about where and how to spend their hard-earned cash. 

Tight Christmas? 
Since 2000, the Ipsos Political Monitor has asked Britons how concerned they are about how much Christmas will cost. 44% – the highest ever percentage – said they were concerned this year, compared to around three in ten in December 2020 and 2014. And concern about the cost of Christmas rises to 58% amongst 18-34s and renters, 57% for ethnic minorities and 50% amongst the C2DE social grade (the bottom three social grades as defined by the Market Research Society).

It’s not just the short-term picture that looks bleak. In the same Ipsos research, 55% of Britons expect the economy to worsen over the next 12 months, and 66% think it will get worse in the next few years. 

With all this pessimism, it follows that consumers will be looking to cut back on expenditure. And according to CACI’s State of the Nation consumer survey, “small luxuries” like takeaways are one of the first casualties. Consistently cited as one of the top three areas where consumers expect to cut back (along with using less energy and switching to cheaper brands), 46% said in September’s research 
that they expected to cut back in the coming months.

Remaining value(s) driven
Chopstix is proudly mass-market, and we don’t aspire to be anything different. We’re not some giant US import, we don’t spend big on advertising and we’re not fussed about influencer endorsements. Our average customer is more Dave or Diane from Doncaster than Hugo or Hermione from Highgate, and while that might mean we’re not seen to be as “sexy” as some other quick service restaurant (QSR) brands, we know exactly who we are and exactly what our customers want, which is great value food that’s faster, fresher and tastier than anything else on the high street. 

We’ve never tried to position ourselves as a small luxury, more as an affordable treat. The truth is, we’ve been built on value since the very start. Before Chopstix even existed, my co-founder Sam and I ran a stall on Camden Market in the early noughties selling £1 pizza slices. We eventually settled on noodles, but value remained at the heart of our offer. 

The UK narrowly avoided a recession this year, but there’s no denying these are challenging times for our consumers, so we need to make sure we’re giving them strong reasons to visit us, and incredible value over the festive period. That’s why every single thing we’re promoting this month – from Christmas meal deals to family bundles to “free noodles for a year” competitions and double reward points offers – is about value. And because we’ve always been competitive on price, we’ve been able to do this without distorting consumers’ perception of value by discounting or resorting to vouchers. 

Season’s treatings
The 2009 recession was a turning point for our business. Like many QSRs, we benefitted as consumers – still keen to eat out – traded down from casual dining brands in search of value for money. As a result, landlords were finally willing to give us a shot at higher profile sites, including Lakeside, where we opened our first ever shopping centre site. Shopping centres are now a key part of our portfolio, with thriving restaurants in locations like Westfield Stratford, Trafford Centre, Manchester Arndale, Liverpool One, Merry Hill and Cardiff St David’s. 

We’ve not stopped growing since 2009, and looking at Christmas and into 2024, value will once again be key to our business growth, as our “affordable treat” positioning continues to distinguish us from “small luxuries”. The outlook is challenging, but opportunities remain for brands able to offer genuine value.   
Menashe Sadik is co-founder and director of Chopstix, the fast-growing QSR brand 

Christmas rostering by Alastair Scott

Christmas is a welcome interlude between the depths of November and January. It is short-lived, but we typically have two objectives. First, to give the customer a great experience so that they come back, and second, to take in as many customers as we can and make as much money as possible for the quiet months ahead.
 
There is a real challenge over Christmas to find the right balance between team and customer. Many businesses close on key days to give the team a break. Others, like me, try to keep going all the way through. We ask the team, and our returning students, to do as many hours as possible, recognising that hours might be a bit scarcer in January.
 
I have always argued that you can make more on Christmas Day than in the whole of January if you are in the Christmas Day lunch brigade and maximising those busy pre-Christmas celebrations and parties. Many of these companies can make well over 25% of their annual profits in this period.
 
Trading patterns and bookings vary so much during the Christmas period and rostering becomes a much bigger challenge. Being able to see planned events and add staff when you are busy, rather than just evenly scheduling people over the day, is a key skill. It is also one that I think is often undervalued. A blanket increase in staff can often just waste valuable profits.
 
The key challenge here is finding staff, communicating with them, motivating them, rewarding them and keeping them energised during their shift. We deliberately call understaffing “stress” because this is the outcome when these things don’t happen.
 
One of the first questions I ask when we have beaten forecast by a long way is: how were the staff? A busy shift may mean great sales, but it can also lead to a demoralised team when sales forecasting and shift planning aren’t in play. 
 
When you have a small team of, say, less than five, you can get away without a good shift plan or shift brief. As you start to grow your numbers, however, this is not possible.
 
On busy days, a shift plan may be the first thing to be ignored, or not thought through properly. This leads to failures in service and frustrations in staff. A poor, on-the-hoof staff allocation is no match for a well-thought-out shift planning template.
 
And that’s not all we need to consider. At the same time as wanting to avoid stress, we are often happy with any labour ratio over the Christmas period because it beats budget. 
 
That’s why we still need to be paying attention to our base and flex budgets. This will ensure that in our exuberance over a good sales line, we don’t just overstaff, particularly on the quieter days.
 
Here’s to hoping as an industry, we have a great Christmas and deliver service which makes our customers want to come back to cover the inevitable tougher times in January.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns

The power of ‘Spoons by Phil Mellows

I don’t use Wetherspoons much these days. There are usually alternatives I prefer. But at one time, when visiting a strange town, ‘Spoons was a useful default. It was open, it had reliable WiFi when most pubs didn’t, it served food until late and the beer was usually okay.

There was also the period when my dad was in hospital. After a bedside visit we’d go to the ‘Spoons with mum for something to eat, to relax and ease the stress for an hour. It was most therapeutic – for us, anyway – and cheap enough to do it frequently. 

Last week, a piece for the Unherd website by visiting American photographer Chris Arnade gained a lot of traction on social media. Titled “Why sneer at Wetherspoons?” it countered the snobbery the brand often attracts.

There was a campaign in Brighton once to block a ‘Spoons opening on the ground floor of a new development. It would, some influential voices said, bring drunkenness and lower the tone of the area. Despite my disagreement, it succeeded. Now there’s a pound shop on the site, so that worked out well.

Perhaps there are sounder grounds for political opposition to the group. Chairman and founder Tim Martin’s support for Brexit, including the distribution of thousands of pro-leave beer mats around the estate, brought a boycott of the chain, almost exclusively by people who would never have gone in one anyway. 

I certainly thought Martin was out of order, using his pubs as a platform for his peculiar brand of free market politics, but it had little or no impact on the business. His customers, you got the impression, weren’t really that bothered. And in some cases, I discovered, pub teams had simply decided not to put the beer mats out.

In another example of workers’ power, in 2018, staff at two Brighton ‘Spoons staged a strike and won a pay rise. An interesting observation here is that to build a union strong enough to do that, you need relatively stable employment in the first place, something not always found in hospitality.

Yet JD Wetherspoon has won awards for being a good employer, ironically laying the ground for union organisation, at least potentially.  Even when ‘Spoons is in the wrong, though, customer boycotts are the wrong approach. They don’t help the staff, a point made by the Brighton strikers, and they dismiss the social value of these pubs, something that’s plainly evident to an outsider like Arnade.

He talks to the regulars, finds out about their ordinary human stories and what the pub means to people who might otherwise be alone. In spite of the political objections, “ultimately, what matters is this: that Wetherspoon is good for people,” he concludes.

Arnade also approves of the architectural aspects of ‘Spoons, even using the word “beautiful”. That may be stretching it, but I know what he means. On my travels, I make a point of checking out the local branch, even though I’m not going to stay for a drink. They are often magnificent buildings which would otherwise be used… for what? I’m glad they’re pubs, because everyone has the chance to experience them.

Lately, I’ve popped into the country’s largest ‘Spoons, the Royal Victoria Pavilion in Ramsgate, Kent, a grand addition to the seafront, and the Foot of the Walk in Leith, Edinburgh, which is partly themed around the life of Robert Louis Stevenson.

Acknowledging and preserving local history is another good thing the chain does. Many branches are like museums, the walls lined with old photographs and documents. Even the carpets will pick up on a theme – Kit Caless has, of course, written a book specifically about the things we blindly trample on.

This week, the Coronet in Holloway, north London, closed – as a Wetherspoon at least. It was one of the company’s most spectacular sites, formerly a cinema. The new owners, thankfully, want to keep it as a pub.

I write a beer and pubs column for Newham Voices in east London, where the borough has recently lost two Wetherspoon pubs, causing regulars not only to mourn the loss of their local, but to ask the company what will happen to all those photographs on the walls – all those memories that give meaning to a place. They have yet to get a good answer.

Finally, on another controversy that exercises the trade, I see beer writers Boak & Bailey are carrying out a scientific analysis that will prove whether the opening of a Wetherspoon puts other pubs out of business, or whether those pubs simply weren’t able to provide a compelling alternative. On that one, I’ll leave the spreadsheet spadework to them.
Phil Mellows is a freelance journalist

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