Last Wednesday we were lucky enough to sponsor the Propel Multi-Club March 2018 Conference. With a line-up of industry experts delivering talks on a variety of topics, we were eager to hear what they had to say.
The talks were of a high quality, with speakers combining their experiences with opinion on the current market and what the future holds. The event was chaired by Propel’s very own Paul Charity, whose questions to the speakers gave us plenty to think about. Here are the key points that we took home with us.
Nervous Time for Hospitality
With stories of struggles within the casual dining sector prevalent in day to day news, it was right that the day kicked-off with a talk on the current challenges and opportunities in the market.
Discounts, high levels of competition, and business rates were reoccurring themes highlighted by speakers as causes of the challenges we are experiencing within casual dining. As most people are aware of the challenges being faced, Ian Edward, an expert on mergers and acquisitions, shared his knowledge on what actions businesses should take to counter them.
With his working background, Ian focused on how an organisation should best prepare to sell. Ian advised to ‘cut or improve their tail of failing sites’ to attract investors or buyers to purchase a healthier business. With more and more competition in the sector, high streets are becoming heavily congested with casual dining sites. However, Ian was full of praise for S4Labour client, Loungers, commenting on how they have bucked the trend by opening sites in areas overlooked, areas such as the Market town of Hinckley.
There is no doubt that Deliveroo has impacted the hospitality sector, whet her it has been for better or for worse was up for discussion at the Propel Multi-Club Conference. Deliveroo was mentioned by many of the speakers, sharing stories of their experience with the food delivery company. James Hacon, Group Brand Strategy Director at Thai Leisure Group, spoke highly of Deliveroo and the positive effect that it’s had on their businesses. James explained that Thai Leisure Group offer Deliveroo drivers free food in an effort to keep them close to their venues, leading to improved delivery time and service; many people in the room seemed keen to take his advice on-board. On the other hand, in a discussion with Propel’s Paul Charity, chairman of Mitchells and Butlers, Bob Ivell, argued that Deliveroo couldn’t work in many of their sites, such as the ever-growing Miller and Carter steak restaurant, as you can’t transport a steak as easily as a pizza.
Yasha Estraikh, of investment company, Piper, reported on the findings of an exclusive survey of UK food service operators, which revealed the effects of the growth in food delivery on their businesses. Overall, reading of the survey was not happy. The main issue operators found with Deliveroo was the cost; Deliveroo take around 30% on all food they deliver, resulting in very little left for the operator. Other issues included, such as loss in restaurant footfall and drivers being disruptive when collecting food, ruining customer experience in the restaurant. Despite the negativity, there were positives raised, such as the increase in breakfast sales – particularly on the weekend.
Importance of Cost Control
After a delicious lunch, we all returned to our seats for a talk by Tim Barrett, analyst at Numis, on the unprecedented current cost environment in the food service sector. Tim began by asking the audience to raise their hand if their labour costs had risen within the last 12 months, and nearly everyone in the room raised their hand.
Tim highlighted the introduction of Business Rates, National Living Wage, and the Brexit result as causes of a significant rise in costs across the sector leading to many businesses struggling or closing.
Despite the gloomy nature of the topic, Tim was hopeful for the near future. He urged operators to avoid the common inclination to increase food and drink prices for customers to regain profit margins as this can have a negative effect on business. Instead, Tim suggested operators should look to cut costs where possible, with a strong nod towards labour scheduling systems, such as S4Labour, as a solution to gaining control of business costs.
Franchise and Growth
Continuing the theme of optimism and growth, we enjoyed talks from Nick Taplin, Chief Executive of Black and White Hospitality, and Max Hilton Jenvey, Global Head of Franchise for Chopstix.
Both speakers emphasised the importance of branding in their growth. Max told the story of how Chopstix revolutionised their in-store appearance and branding, to make themselves more attractive to the customer and a popular proposition for a potential franchisee. Both Max and Nick stressed the importance of uniqueness and simplicity in their product; by providing a relatively simply offering, delivered at a high standard, leading them to stand out in a crowded market, gain higher customer satisfaction, and keep control of their costs.
Nick, business partner of Marco Pierre White, spoke enthusiastically about bringing destination restaurants back into hotels. Much like Loungers bucking the trend of site location, Nick wants to keep the Marco Pierre White restaurants off the high street, and in doing so, differentiates their restaurants from other chains. The success of this and their overall brand was evident, their sites are performing well, their books are selling, and a film about Marco’s life is set to be released in 2019.
The Beauty of British Hospitality
With great minds sharing their experience and knowledge of the sector, it was hard to not feel a sense of pride and excitement about British hospitality. Sarah Bridge, founder of the aLadyofLeisure.com, shared her fondest memories of her travels across the UK. Sarah stressed the importance of operators striking the right balance between going the extra-mile and being overly-attentive. For example, we were told the story of when she a swarm of bees entered her room at the Manor House, Castle Combe, causing distress, she was moved to another room, and later found in there the gift of two jars of honey from their very own hive with a cute message saying that ‘we (the bees) are sorry we disturbed you earlier. Next time you visit we promise to bee-have!’. It was a pleasure to see that the ‘personal touch’ is still alive within British Hospitality.
We were lucky to hear Paul Wells, Chairman of Charles Wells, recount the journey of the Charles Wells pub estate. What was pleasing to learn from Paul, was that despite some of the challenges Charles Wells has experienced in the past, they had undergone European expansion, their family values remained, and they maintained a focus on localism. Paul spoke passionately about their journey of opening pubs across France; showing how the core aspects of British pubs, such as good quality cask ales, were popular across the pond. Paul got us excited for the future of Charles Wells, hinting at more experience based culinary experiences within sites, such as their pizza, pots, and pints offering, bringing the Kitchen into the restaurant.
With stories of struggles within the casual dining sector rife within the news at the moment, it would have been wrong for speakers to overlook challenges and issues. However, the overall message was that we are in the latter phase of the storm that we are presently enduring, and operators should be starting to look up again. It was clear that the people in the room were looking to achieve tighter management of their businesses, which would lessen the effects of a challenging market. Despite the current nervousness in the sector, talks on growth, branding, and franchising certainly whetted the appetite for the future of hospitality.