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Morning Briefing for pub, restaurant and food wervice operators
Fri 13th Sep 2019 - Friday Opinion
Subjects: 106 sleeps ’til Christmas, off the rails, the cheap labour era is over, and an amazing entrepreneur
Authors: James Hacon, Glynn Davis, Karl Murray and Ann Elliott

106 sleeps ’til Christmas by James Hacon

December is a vital month for the restaurant sector. Festive bookings and the general buzz around retail means bumper revenue for most. What is the data telling us around this important time of year? Our research suggests it’s vital to concentrate on more than pre-booked corporate parties and consider leisure visitors and gifting opportunities too.

Booking trends
Christmas marketing efforts are well under way for many restaurant, bar and pub groups, with festive emails starting to fill up inboxes from late last month as people sat on the beach on their holidays. Consumers are responding, according to restaurant reservation solution liveRES, with an early flurry of bookings coming through from the end of August, continuing and building from there. They are seeing the peak booking day for December reservations move back year on year, with a trend towards later booking. In 2017 it was 3 December and in 2018 it was 9 December, almost a week later. It’s also worth noting more than two-thirds (70%) of all bookings for December were made during that month.

This reinforces what operators are telling us and what we are seeing within our client base. There has been an overall reduction in the largest group bookings, with many companies contributing less towards such events or encouraging departmental Christmas parties rather than whole-company events. This movement is also flowing through to increased informal colleague get-togethers during the festive period.

While pre-booking is important, it’s also vital brands don’t concentrate all their marketing efforts on groups and corporate – there’s a great opportunity in individual bookings at this time of year.

When it comes to the Christmas party crowd the key seems to be having a point of difference, with a lean towards adding entertainment or enhanced experiences rather than straight dining options. Online booking platform DesignMyNight reported the three most searched-for terms on its site in December 2018 were “quirky Christmas events”, “something different Christmas” and “fun Christmas parties” – so it’s worth considering adding emotional hooks to your descriptions and search terms. The most visited venues on its platform last festive period were London Shuffle Club, Flight Club and West End Musical Brunch.

Enquiry management
We repeated our test from last year, analysing the average time it takes companies to respond to a corporate Christmas enquiry. We tried to contact five well-known branded venues in London – 24 hours later, we have yet to receive a reply from a single one. At least three venues have dedicated events and reservations teams from what we can see on LinkedIn. It’s not rocket science but to convert business you must respond quickly – consumers expect same-day responses. Before putting your marketing into overdrive on Christmas, it might be worth checking your capacity and systems in managing the enquiries as it’s all very well turning on the taps but if it’s running down the plughole, what’s the point?

Sector feedback solution provider Feed It Back surveyed festive guests last year and found the most prominent reason for choosing a venue for a Christmas event was the booker had previously enjoyed a visit to the venue (38%), followed by a recommendation from friends or family (15%). This suggests if you deliver bad customer service to those guests you are putting an already loyal customer offside.

In addition to table bookings during the festive period there’s a lot of opportunity in gifting, with the continued growth in the trend of experiences over things. One of our clients went from a standing start to more than £1.5m in gift voucher sales in one year, with more than half sold in November and December – representing 4% of their overall annual revenue. This is big business. My own experiences show consumers respond much better to experience-based vouchers, with “meal for two” or “cocktails for four” performing equally or better than monetary alternatives. You should almost certainly offer both.

Many hospitality providers are responding to the trend in experiential leisure and competitive socialising by offering their own experiences at their venues, such as cocktail masterclasses and cooking demonstrations. It’s all about offering something a little different yet aligned to your brand – make them searchable and purchasable as online vouchers. You’ll be shocked how many last-minute sales you get on Christmas Eve – perhaps not if your Christmas gift-buying habits are like mine!

DesignMyNight data reinforces this trend, with its vouchering platform Soda seeing a 150% increase in sales in December last year compared with previous months.

With the huge peak in search and transactions around Black Friday and Cyber Monday, consider your plan not just for people out shopping but also those looking for gifts. One client of ours sold more than £200,000 in gift vouchers over this one weekend last year.

Looking around our sector it seems hiring temporary workers has become mainstream, especially in the kitchen, as recruitment becomes increasingly difficult and many chefs choose this route as a long-term option. Christmas is a massive peak for almost everyone in our sector, with increased use of temporary staff. Dawn Redman, chief executive of H&R Recruitment, believes meeting these demands at Christmas is becoming even more difficult, with many of the Eastern European workforce that have traditionally supported our sector leaving the country, heading back home to build on the training and skills they have learned in the UK. She thinks this pinch-point will further reinforce the need for the sector to focus on training, generating home-grown talent and nurturing employees.

The question of a short-term gap in labour and skills will undoubtedly lead many hospitality businesses to re-evaluate capacity at this busy time of year – and it’s likely to have an impact on like-for-like performance for some players.

Christmas legacy
As you might expect there’s a rise in negative online reviews at this time of year, with customers having higher expectations, the potential embarrassment effect for event organisers among their colleagues, and the added pressure of peak volume on venues. Feed It Back highlights the two key operational areas that drive this negative feedback are wait times and cold food. A lot of these issues can be partially solved through your proposition development and putting the right processes in place, ensuring you know the limit of your kitchens, staggering booking times, communicating with guests on the night, and focusing on additional training ahead of the festive period.

The good news is for brands that get it right, those that make the guest feel loved and deliver a great experience, the evidence suggests festive guests are highly likely to return – it’s a great way to introduce new customers to your business. With this in mind it’s worth considering a mechanism to capture data of the broader guests at the table rather than just the organiser. Also, offer a reason to come back in January – encourage a habit, reinforce yourself as a go-to place sooner rather than later while supporting a traditionally low month with extra covers.
James Hacon is chief executive of Think Hospitality – food and beverage visionaries, innovators and strategists that work with multi-site brands, investors and developers across the world as consultants and venture partners 

Off the rails by Glynn Davis

When it was recently announced the UK would no longer be a member of train group Eurail, which runs the Interrail programme of heavily-discounted unlimited train travel across Europe, such was the outcry the decision was almost immediately reversed. Even the transport secretary waded in to suggest it was a poor decision.

Margaret Thatcher privatised many things but sensibly left the railways to successor John Major to deal with as she recognised the flak she would receive from meddling with our beloved railways. Despite the country’s constant carping about our useless rail system, deep down we all seem to have an abiding love for trains. Yes, they often let us down but it seems there’s something about train travel lodged in the British psyche.

There has been talk many times of scrapping the overnight sleepers to Cornwall and Scotland but all moves have failed following vociferous campaigns. That thinking seems to have finally reversed as significant investment has been made this year to upgrade rolling stock on the Scotland sleeper route. Part of the move includes improving the food offer and dining facilities. It seems despite numerous initiatives the railways have failed to rid themselves of the age-old joke about unappetising British Rail sandwiches with bread curling up at the edges.

I don’t remember it being quite that bad. I cherish my memories of travelling from Yorkshire to London and enjoying the full English breakfast in the restaurant car. It was silver service delivered by waiters in waistcoats and featuring bacon, sausage, beans, mushrooms, fried egg, fried bread, tomato and, best of all, sautéed potatoes and unlimited toast. All that for £7.50, which was a fortune at the time but it felt worth it for the quality of food and service and the scenery through the window. It also gave us the equivalent of a seat in first class for the near two-hour journey for a price much less than an actual first-class ticket.   

Unfortunately, this was as good as it got in my lifetime. The dining facilities on trains have been constantly watered down from full dining cars to today’s much more basic offer. However, this gradual erosion in the quality and service levels of food and drink on trains isn’t restricted to the UK. Over the years I have undertaken many intercontinental train journeys because my wife isn’t a keen flyer. Many of these trips have been on sleeper services including travelling to Barcelona, Florence, Nice and Vienna. They invariably involved grabbing a person with a clipboard on the platform and booking a table in the restaurant car. Many memorable dinners were enjoyed, notably squid with black ink risotto when Barcelona-bound and goulash on route to Moscow from Cologne. 

The vast majority of these restaurant cars have sadly been taken out of service and our options now are to eat in a restaurant beforehand or take something on the train. Neither of these options is anywhere near as exciting or as interesting as those late-night dining car experiences.

Clearly the removal of full dining facilities across much of Europe suggests the model is no longer viable. It’s only the preserve of special luxury rail services such as the Orient Express. Perhaps its demise is partly down to the dramatic improvement in foodservice facilities at all transport hubs, including major train stations.

Any demand for decent dining cars has been well and truly sated by the influx of quality operators in train stations – many of them offer dining on the premises or take-out for eating on the train. While Interrail might have been saved, it’s sadly far too late to enjoy dining in style on board the train.
Glynn Davis is a leading commentator on retail trends

The cheap labour era is over by Karl Murray 

For many in the UK’s hospitality industry Brexit will define the end of an era for cheap front-line labour. However, regardless of the fact we remain uncertain about the details of how (and when) it will unfold, it seems the sheer anxiety of Brexit’s arrival has triggered the end of that era already. 

Currently, 15% of the 4.5 million people in the UK’s hospitality industry are EU nationals and research shows businesses can expect to lose up to 30% of those workers once Brexit hits. Needless to say this number is terrifying for employers, who must figure out ways to replace those workers while keeping their businesses afloat. Even before Brexit arrives and forces this large pool of workers to leave the UK, businesses are taking pre-emptive measures to fill the gap – and it’s already driving up costs across the industry.

First comes the upfront costs of attracting and hiring local talent who, according to research by hospitality recruiter The Change Group, expect an average 18% higher salary than their EU counterparts. Managing this spike in labour costs while still turning a profit forces companies to shift their labour strategies to focus on “quality over quantity” when it comes to staff – a strategy that is in itself expensive. 

On top of this higher salary baseline, it has kick-started a cycle in which companies are forced to push up wages even higher to make their job more desirable compared with competitors or risk losing the ability to attract long-term local staff. In fact, data from independent job board CV-Library reveals average salaries across the UK have reached a five-year high and salaries in hospitality specifically will continue to rise by 10% a year as a result of Brexit-related staffing changes. 

It also means companies are having to increasingly invest in ways to retain the talent they have or plan to have in the future. Many businesses have started to buy technology and systems to help reduce staff turnover, including tools for better training and development, fostering a more engaging workplace culture, and strengthening transparency and trust from management. Of course all this costs money and significantly hits profits. Earlier this year JD Wetherspoon reported profits down 10% despite consistently strong sales growth as its revenues weren’t translating into profits because of higher costs for retaining staff.

Many job-seekers have realised this is a great time to apply for hospitality roles as they are likely to receive higher pay, better benefits and a more engaging workplace culture than they would have enjoyed pre-Brexit. In fact, applications for hospitality roles have increased almost 50% month-on-month this year as people take advantage of this rise in pay. On top of that, opportunities are becoming endless as employers open up as many roles as possible. Travelodge, which announced it aims to recruit 3,000 students this summer in an attempt to be “Brexit ready”, is just one example.  

This means the beginning of the end for cheap front-line labour is already well under way. As hospitality employers, simply dwelling on the fears of high costs will do little to prepare you for the inevitable. As competitors begin to get a head start, falling behind in strengthening your workplace culture and boosting methods for retention could cost you the success of your business. The best course of action would be to accept these new costs and focus on the strategy shift. At the end of the day, it means being as efficient and lean as possible with your staff and operations – why not try to view that as a silver lining to all this chaos? 
Karl Murray is head of strategic accounts at Eko, an all-in-one employee platform that empowers non-desk workforces –

An amazing entrepreneur by Ann Elliott

My dad’s elder brother, Uncle Charlie, died a few weeks ago aged 95 and I was asked to say a few words at his funeral. He was an amazing man and an entrepreneur all his life.

He passed his 11-plus and, despite the fact his father didn’t believe in education, went on to Almondbury High School, the best in the area. While there he bought sweets wholesale from a shop on the way to school and sold them in the schoolyard – not quite the behaviour expected of a grammar school boy and he was almost expelled.

My grandfather died in 1942 when Charlie was 18, leaving him head of the family and with a small butcher’s shop to run in the centre of Huddersfield. According to my father the shop was just about scraping a living – rationing was in full swing and many customers had relocated to new estates outside town when their houses were demolished in slum-clearance programmes.

Charlie invested in a travelling shop, driving out to the estates where his customers now lived – it was the only travelling shop around. At the same time he installed the first refrigerated window display in his shop, meaning produce remained fresh while on display.

Meat and bacon were rationed at the time but not eggs and poultry so Charlie, ever the entrepreneur, realised this presented him with a huge opportunity for expansion. He decided to buy hens that were past their laying time, which farmers didn’t want, and sell the cooked product – hen meat tastes just like chicken but is a lot cheaper. He found hens for sale in Colne Valley, Lancashire, and planned to bring them back to Yorkshire on the train. Unfortunately live animals weren’t allowed at Huddersfield railway station so he solved that obstacle by taking his newly bought hens on the train and killing them in transit, plucking them during the journey and throwing the feathers out the train window. 

When he got married Charlie built a garage, not for a car but to fill with hen cages. The land opposite his house became available so he rented it and built two hen huts and filled them with laying hens. When land came up for sale a mile away he bought that and expanded his growing business. Eventually he closed the shop and transferred everything to his new building, creating the first “farm shop” in the country and winning many local, regional and national awards. In time he expanded the shop into a successful restaurant and cafe, which burned down six years ago. The new restaurant and cafe opened yesterday and he worked in the business until (almost) the day he died.

He had an extraordinary life and lived through much adversity. As I was writing his obituary I thought about what made him such a successful entrepreneur. He was, without doubt, resilient, enterprising, determined, stubborn, opportunistic and hard working (often to the detriment of family life). He was a visionary and made things happen. He had no time for people who weren’t as committed as himself and many who had worked for him for 40 years or more were at the funeral. 

He didn’t suffer fools gladly. His word was his bond. His customers loved him.

My uncle knew no other life than that of an entrepreneur. My grandfather, his dad, set up his own football pools taking bets on results and using my dad as a runner long before the pools were established nationally. I can’t claim my family’s entrepreneurship has passed its baton on to me but I love having my own business rather than working for someone else. Perhaps that’s what it’s all about at the end of the day – freedom and independence.

I also love hearing stories from entrepreneurs about how they started their own business and the skills they believe they required to make a success of their venture. That’s why yesterday’s Women’s Entrepreneur Conference is so close to my heart. Thank you to everyone for making it such a success.
Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector –

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