Propel Quarterly Autumn 2019

Page 1

uarterly The essential information resource for pub, restaurant & foodservice operators

Bombay dreams Shamil and Kavi Thakrar on the inspiration behind Dishoom

Inside: Chopstix managing director Jon Lake interview K10 managing director Reuben Todd interview Propel Coffee Conference highlights Kate Nicholls' landmark moment Ten global mega-trends Here comes the softs parade Mitigating senior hire derailers Ann Elliott discusses aesthetics


ISSUE 28 • AUTUMN 2019






There’s always something going on


Bombay dreams


Here comes the softs parade


A landmark moment


Ten global mega-trends


Going against the flow


Second chances


Mitigating senior hire derailers


Raw success

43 54

Propel Summer Conference highlights


Dinner has landed

63 69

Propel Coffee Conference highlights


24 Published by Propel Hospitality Unit 26, Graylands Estate, Langhurstwood Road, Horsham, West Sussex RH12 4QD Managing Director Paul Charity T: 07899 984814 E: Managing Editor Paul Bishop T: 01444 817690 E:


Director Jo Charity T: 01444 810304 E: Partnerships Director Jill Harrington T: 01444 810306 E: Events Co-ordinator Anne Steele T: 01444 817691 E:

Deputy Editor Martin Cooper T: 01444 817689 E:

Design & Production Jonathan Taylor T: 01403 256614 E:

Insights Editor Mark Wingett E:

Paul Lawrence E:


Welcome from insights editor Mark Wingett

Dishoom founders Shamil and Kavi Thakrar

Martin Cooper gets in the mood for mixers

Kate Nicholls hails the sector deal for tourism

James Hacon reveals ten factors that are having a huge impact on the hospitality sector

Chopstix managing director Jon Lake

Glynn Davis looks at companies giving prisoners a way to build their lives and a new career

Chris Edger identifies a threat to the effectiveness of new leaders

K10 managing director Reuben Todd

Outlook – blustery Paul Chase confronts some of the headwinds operators face during an uncertain period

NPD Group's Dominic Allport reveals six themes that will shape our out-of-home industry

Getting the look Ann Elliott asks whether aesthetics matter? Contributors Ann Elliott, Dominic Allport, Paul Chase, Martin Cooper, Glynn Davis, Chris Edger, James Hacon, Kate Nicholls, and Mark Wingett Printing and Distribution Bishops Printers, Walton Road Farlington, Portsmouth PO6 1TR



©Propel Hospitality Ltd. 2019

We invested £44m in our Great British Pubs in 2018, our largest investment 2- " 2#@ # 5'** !-,2',3# 2- ',4#12 5'2& + '2'-, ', ÓÑÒÚ@ - h ," -32 '$ 5# & 4# 2&# 0'%&2 .3 $-0 7-3A ! ** 31 -, 08085 94 95 96 or visit


There’s always something going on I

was intrigued to read a report recently that surmised “an absence of real news across the foodservice sector underlines a sense of lockdown”. It reminded me of my time as a young journalist when I would moan it was “quiet out there” to be told “there’s always something going on”. August, for example, is known by journalists as “silly season” because many chief executives and managing directors head off on holiday to recharge their batteries for the vital runup to the end of year. But nothing going on? Hardly. Many will be stretching every sinew and engaging every brain cell to work out how to maintain momentum or kick-start it. Then, of course, in the grander scheme of things there’s a proposed £3bn pub deal and a £9bn merger between restaurant delivery aggregators to keep the mind occupied. I have always assumed the third quarter of the year is the most critical for operators, perhaps not in terms of sales, although pub operators are lapping some particularly tough comparables, but in terms of strategy. Where does our brand/business want to be this time next year? It would help enormously if we knew where our country was going to be at the same time, with all rhetoric currently pointing to a decision on 31 October, for good or bad. An end to uncertainty should at least be welcomed. In terms of mergers and acquisitions, the sector spent the first part of the year waiting to see how the Loungers IPO would go – not as great as first hoped but solid with expectations it will kick on from here. That gaze then fell on the process for Giggling Squid. As Propel has revealed, former Cote backer CBPE was leading the race to invest in the fast-growing Thai group but with the valuation placed on the Thai chain not met, that process was subsequently pulled. The success of that process and the multiple secured on valuation would have been of particular interest to companies such as Honest Burgers, Pho and The Alchemist, all similar-sized groups that are also expected to test the market in the next 12 months. While that mid-sized category and mid-market casual dining sector remains under pressure – and there seems to be no light at the end of that tunnel just yet – investment in smaller, more fledgling businesses and interest in bigger consolidation plays remain. First and foremost, the proposed Stonegate Pub Company and Ei Group deal will be great for the pub sector if it’s approved because further investment will be put into the industry. The price being paid also shows the sort of value placed on pub businesses but it will also provide significant opportunities for others to grow their own estates. Besides the reported 100 pubs Stonegate will sell to get the deal through, it’s inevitable further pubs will be sold as the company looks to reduce debt levels. There is also a plethora of well-run managed pub groups that are at a point where consolidation is a big part of their strategy for the


coming year. Young’s and Fuller’s both sit on war chests ready to engage when the right opportunity becomes available, as is Punch and NewRiver. Diversification is, or at least should be, playing a greater role in the restaurant sector as operators realise the days of the 100-strong chain are over but what does that mean for those brands looking at their own expansion runway? Is now the time to look at making strategic partnerships? Vietnamese street food concept Hop, which has grown to five sites in central London, recently told Propel it would begin a fund-raising process that would be the largest the business had embarked on, with a target of circa £3m to secure its pipeline of sites for the next two years. Would it be worth Pho, which it obviously shares a cuisine with, looking at the business as another growth avenue and something that could make it even more attractive to potential suitors? In a fast-paced sector, would a successful acquisition take pressure off the core brand and bring cost efficiencies for the enlarged business? Arguably yes. The same could be said for Ian Neillchaired sushi concept K10, which is profiled in this issue. Established in central London and with a concept and cuisine that is bang on trend.

Dishoom Kensington Of course, when you are battling through one of the toughest trading periods it can be hard to look up and spot these opportunities, let alone act on them, but with no sign of conditions changing soon, some thinking and investing outside the box should come closer into view. Of course, the sector still provides shining examples of how far old-fashioned hospitality aspects such as excellent service and offer can get you. Dishoom, another company highlighted in this issue, continues to see consumers queuing up to try its contemporary take on Indian food. Its strategy and success is based on employees delivering Dishoom’s ethos of “seva” (selfless service) – ensuring there’s always something going on.


Mark Wingett Insights editor Propel

“The sector still provides shining examples of how far old-fashioned hospitality aspects such as excellent service and offer can get you”

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Bombay dreams

Shamil and Kavi Thakrar talk to Glynn Davis about the inspiration behind their concept Dishoom, which has played a major role in redefining Indian cuisine in the UK




Double bacon naan roll

Dishoom Manchester

Chicken livers on toast

Dishoom Carnaby


rani cafes sprang up in Bombay when a wave of Persian immigrants built family-owned businesses on street corners because the superstitious Hindu population preferred to avoid such locations believing street corners brought bad luck. However, this superstition didn’t stop Hindus from frequenting the cafes and, rather like the British pub that was seemingly built on the corner of every Victorian street, Irani cafes played a key role in offering an alternative to the segregated eating places at the time. They were refreshingly open to all castes. Without aspirations for a venue on every street corner – in fact, quite the opposite – those Irani cafes are the inspiration behind cousins Shamil and Kavi Thakrar’s creation of Dishoom, which has played a major role in redefining Indian cuisine in the UK. Shamil suggests the long relationship between Britain and India had led to complacency in terms of the continued UK perception of India as a series of clichés ranging from Bollywood to the last days of the Raj and cricket to the British curry house.

Depth of richness He says: “It’s just not like that. It has a depth of richness. In Bombay you have art deco buildings and also the food. It’s not about curry houses – this is a very British tradition. Indian food in the UK was Benares and Amaya or it was a curry house. We felt there was a lot more to be said

“There was a heaviness and we wanted our food to be very fresh, with lime, chilli and garlic and to be the food of the people so we modelled the menu on the comfort food of Irani cafes in Bombay”

and then we came across this rich seam of the Irani cafes in Bombay.” This inspiration also provided the Thakrars with a blueprint to move away from typical curry-house dishes, which were based loosely on the Mughlai cuisine of the 15th and 16th centuries and featured rich ingredients such as saffron, dried fruit and cream. Kavi says: “There was a heaviness and we wanted our food to be very fresh, with lime, chilli and garlic and to be the food of the people so we modelled the menu on the comfort food of Irani cafes in Bombay. As we have returned to Bombay we have refined the menu, even though what we have today is similar to what we had at the start. It was fully formed and a decent menu.” This was also the view of their first landlord, Shaftesbury, which Dishoom wooed in an unusual way for its first site, in Covent Garden. Shamil says: “We got them to come to my house where we served them grilled food, set up a bar and ran them through some Powerpoint slides. Through the fog of alcohol they agreed to take a gamble on us. Landlords were starting to see beyond just big brands.” It was certainly a big initial move for the first-time restaurateurs as the unit covered 5,000 square feet and encompassed 160 covers. Shamil says: “You have to jump at some point.” It certainly came as a surprise to others when the Thakrars told them they planned to open an Indian restaurant during the height of the ▲ AUTUMN 2019 PROPEL QUARTERLY


Feature recession – they were branded “insane”. Shamil says no-one else was offering regional Indian cuisine at the time apart from a few restaurants in London’s Southall and Drummond Street, which weren’t particularly accessible. He believes Dishoom helped to change this situation and he’s proud to have made it easier for the likes of Kricket, Gunpowder, Indian Accent and Gymkhana to break the mould of Indian dining in Britain.

Dishoom Carnaby

Breakfast However, none of these have embraced breakfast in the same way as Dishoom. In 2008, when the cousins indicated their secret weapon was to open their restaurant for breakfast, the view was they were “even madder”. Breakfast, however, is a popular time for Irani cafes and so the daypart was integral to Dishoom and the thinking behind its food offer was to be faithful to the dishes or amount breakfast do the complete opposite accounts for of and have “flights of fancy”. Into the latter camp came the total customer ground-breaking bacon naan volumes roll, which was a perfect foil to authentic alternatives such as akoori scrambled eggs. The bacon naan roll remains a bestseller, helping Dishoom make a name for itself, but it was far from an overnight success. Shamil says: “It took a long time. It was three years of building but the bacon roll seemed to resonate and bread baked to order is better than your usual bacon sandwich, so it really helped us.” Breakfast is served until 11:45am – at which point the all-day menu is brought out – and accounts for one-fifth (20%) of total customer volumes. Although Shamil says breakfast has been seen as something of a saviour in the hospitality industry, it isn’t straightforward because the staff economics and price expectations of customers are “very different” to other parts of the day.


Second site Dishoom Kensington



By 2012 the cousins were confident enough to take a second unit, in Shoreditch, but they had no intention of building a cookie-cutter chain. Shamil says: “The idea of a traditional chain has negative connotations to us. The point of it must be to leverage economics but we’ve chosen to do the opposite. Each site we’ve opened is built around a story, a narrative. We’ve certainly not leveraged any scale economics.” For instance, the Kingly Street site is built around the story of a 1960s singer, while Kensington was created as an immersive theatre. The themes are built from frequent visits to Bombay, where the concepts are created and required furniture and fittings sourced from the region while working with preferred designer Macaulay Sinclair. Shamil says: “Macaulay Sinclair expresses our thoughts and story and ensures people visiting Dishoom feel conveyed to a different time and place.” ▲

Feature Dishoom Carnaby

Quality This focus on quality is a key driver of the business. Shamil says: “The bottleneck on growth is quality. We make sure we enhance the food and the team and, if we grow, then good.” He adds this thinking stems from a business epiphany he experienced, which suggested a focus on profits was the wrong approach to achieving business success. He says: “At Covent Garden we were looking at profitability but thought if we focused on awesome food and drinks as well as a happy team, the revenues and profits would come along as long as we controlled costs. It


was a real epiphany and we saw something much deeper.” This deeper thinking could be seen in 2014 when the company introduced an initiative that for every meal served in a Dishoom restaurant, the company donates a meal to a child in the UK or India. To date, seven million meals have been distributed.

Breaking down barriers Dishoom also has a core desire to bring different people together, as Irani cafes do. Shamil says: “When celebrities come here they are likely to be sat next to students drinking ▲


“At Covent Garden we were looking at profitability but thought if we focused on awesome food and drinks as well as a happy team, the revenues and profits would come along as long as we controlled costs”


Propel showcases pub, restaurant and food service property opportunities

Bell Hotel – Retail (with publican food offer) 17 letting rooms – Refurbishment Planned

Bull – Tenancy – 5 letting rooms

• The Bull is a beautiful listed traditional village pub with letting rooms in

• The Bell Hotel, Suffolk is a stunning, period pub/hotel in the small market

The pub also offer Cask Marque ales and has a beautiful outdoor courtyard garden which offers fantastic appeal for lazy summer days and evenings.

• This opportunity offers plenty of trading space. The pub has a large function

exterior to its very best, whilst maintaining its beautiful historical appeal.

• The Bell Hotel will undergo an external and internal decoration, with

town of Mildenhall.

Walsingham, North Norfolk.

• Punch will be looking to invest in this pub to enhance the interior and

room with separate bar, toilets, cellar and prep area. Upstairs there are 17 en-suite letting bedrooms. new furniture.

Kings Arms – Retail (with publican food offer) – 4 letting rooms

Grand Junction – Tenancy – Large beer garden

• The Kings Arms is located in the village of Monkton Farleigh, which sits between

• The Grand Junction Arms is situated in a picturesque spot next to the Grand

• It is a popular, family friendly gastro and surrounded by an area of

the spa city of Bath and the town of Bradford-on-Avon. It’s a very pretty area of Somerset and both destinations are very popular, with year-round tourist trade. The Grade II listed Kings Arms has a strong reputation as a destination premium pub but is also well-supported by the local community. Recent investment, saw the Kings Arms bene¿t from 4 good quality letting rooms and provides a great food and drink offer. The beautiful beer garden is surrounded by mature trees and relaxing atmosphere.

Junction Canal, located on the outskirts of the beautiful market town of Tring, Hertfordshire. outstanding natural beauty. Popular with families, walkers, couples and groups of friends.

• Warmer days and evenings are enjoyed in the large beer garden watching

the colourful barges pass by on the canal whilst children play in the play area.

Castle of Comfort – Tenancy – Village hub

Horse & Groom – Lease – Refurbishment Planned

• The Horse & Groom, Mortimer, Berkshire is lovely Cask Marque community

• The Castle of Comfort is a Cask Marque community pub which sits 4 miles from

• The pub is about It has a beautiful traditional country pub appearance and

village pub situated in a desirable village. The village is surrounded by open countryside with plenty of local walks, the village school is next door to the pub and its opposite Mortimer Cricket Club. Set to undergoing a signi¿cant refurbishment to enhance the trading areas and give the pub a beautiful new look and feel throughout.

To ¿nd out more call: 01283 501999

the market town of Alton in the centre of the village of Medsted, Hampshire.

is known for serving quality pub food including a Sunday Roast and drinks alongside cask ales. The pub offers a welcoming spacious beer garden and plenty of outdoor seating for the summer months and open countryside surrounds the village attracting walkers and cyclists to the pub, alongside those who drive there from the local area for food and drinks.

or visit:

Feature Founders Shamil and Kavi Thakrar

chai. If we can get people to celebrate their different cultures at Dishoom, we can break down barriers.” This thought process is also reflected in annual festival the Family Mela, which the company holds for its employees and wider Dishoom family. All restaurants close for the day while a large celebration takes place including food, drink and fairground rides. What started out as a jamboree for 70 people now reaches 1,800.

Dishoom facts LOCATIONS: ■ Covent Garden ■ Shoreditch ■ King’s Cross ■ Carnaby (Kingly Street) ■ Kensington ■ Edinburgh ■ Manchester MOST COVERS: ■ 300 – at King’s Cross

“When you come from London you have lots of baggage. You’ve got to be humble and make sure you understand the local market and only then do you have the right to trade there”

TOP-SELLING DISHES: ■ Bacon and egg naan roll (£7.50) ■ House black daal (£6.20) AVERAGE SPEND: ■ Breakfast £12.50 ■ Lunch £17.50 ■ Dinner £27.50



Festival-goers includes staff from the group’s wider-flung venues, in Manchester and Edinburgh, which have been added to the five Dishooms in London. Shamil is keen to highlight the sensitivity and care taken when the brand made its move outside the capital. He says: “When you come from London you have lots of baggage. You’ve got to be humble and make sure you understand the local market and only then do you have the right to trade there. We visit these sites regularly and the teams are all local. The last thing we want to be is an arrogant London brand.”

Expansion Careful thinking extends to the business’ overall expansion plan, with no commitment to open more outlets. Shamil says: “We’ll look for sites that resonate. We’re not in a massive hurry.” He suggests any new location must be able to attract high volumes of people, even if they aren’t in high-footfall locations. He cites Dishoom’s King’s Cross unit as accommodating 300 people but the sweet spot is still a significant 200 covers. One unit that proved irresistible is the former Jamie’s Italian next door to Dishoom’s debut Covent Garden site, which will enable the creation of a sizeable Dishoom flagship following a major redesign of the combined property. Kavi says: “The opportunity came up and next year will be our tenth anniversary so it will be nice to be able to do it over. It will be a good project.” While this will undoubtedly be a world away from Irani cafes in terms of size and stature, the Thakrars are committed to retaining the core elements of these simple Bombay venues within their burgeoning Dishoom operation in the UK.


Here comes the softs parade Martin Cooper says there’s a great opportunity for operators as younger generations ditch the drink in favour of no and low-alcohol brands


ou can fight it, but the alcohol-free revolution has begun. There has been a huge increase in consumer demand for low ABV serves, a trend driven by millennials and Generation Z and one that shows now signs of slowing. According to the latest British Lifestyles report by Mintel, one-fifth (20%) of UK adults don’t drink alcohol and of those that do, almost half (47%) have cut their intake.

Franklin & Sons Drinks manufacturer and distributor Global Brands says sales of its tonics, mixers and soft drinks range Franklin & Sons more than doubled during its last financial year as “premiumisation and provenance” drive growth. Franklin & Sons said its research revealed one-fifth of consumers opt for low or noalcohol options on “big drinking occasions”. Brand manager Rosie Crossman says:

“This trend means it’s important operators incorporate serves that are less alcoholic yet remain seasonal and sophisticated – ideal for festive occasions. These serves can include low ABV spirits such as vermouth, port, sherry and bitters. “These all pair perfectly with the Franklin & Sons Flavour Collection, which has been created to mix well with a variety of lower ABV spirits as well as gin, giving consumers an opportunity to experiment further with tonic combinations.

“It’s important operators incorporate serves that are less alcoholic yet remain seasonal and sophisticated – ideal for festive occasions” Franklin & Sons brand manager Rosie Crossman


Franklins’ festive soft drink suggestion Brewed ginger beer with malted barley and a squeeze of lemon

Cloudy apple and Yorkshire rhubarb with cinnamon Franklin & Sons’ premium soft drinks range includes seven combinations, with the cloudy apple and Yorkshire rhubarb with cinnamon flavour popular at Christmas. Brand manager Rosie Crossman says: “Cinnamon makes it a stand-out premium drink for the adult palate. It can be enjoyed as a standalone refreshment or mixed with alcohol as the perfect base for a cocktail. For example, to make mistletoe and wine combine red wine, a touch of lemon juice, a dash of pimento dram and top with cloudy apple and Yorkshire rhubarb

“Coming in four flavours – Rosemary Tonic Water with Black Olive, Rhubarb Tonic Water with Hibiscus, Elderflower Tonic Water with Cucumber, and Pink Grapefruit with Bergamot – the range offers an innovative way to pair drinks that consumers are searching for on out-of-home occasions.” ▲

with cinnamon. Garnish with a slice of apple and a stick of cinnamon to make a sophisticated and festive cocktail.”


Franklin & Sons brand manager Rosie Crossman says: “This drink combines sweet, malty characteristics with a sharp citrus edge, while the warm ginger tones carry through to a fiery finish. “This recipe takes inspiration from the original ginger beer developed by the Franklin brothers in Victorian Britain. To deliver the deepest flavour possible and a superb building heat, the ginger is brewed with malted barley for five days and halted just before the sugar turns into alcohol. A squeeze of lemon is added to create a refreshing serve perfect for a festive standalone refreshment or the perfect mixer to serve with rum to mark the beginning of the season.”

Feature How to pair food and soft drinks

Frobisher’s Jessica Waller, head of brand at fruit juice and drinks company Frobisher’s, reveals there’s a great opportunity for operators to make food and soft drink pairing more “engaging and exciting for customers”. She says: “Consumers are switched on to food and drink pairings when it comes to wine and beer so a non-alcoholic spin on the concept engages consumers looking for a well-matched soft drink. “Part of our brand mission is to provide a grown-up non-alcoholic offering and inspire the large number of consumers who are choosing not to drink when out of home. For those pre-dinner drinks or a drink at the bar with a snack, a knowledgeable bartender who can suggest a varied soft drinks menu and partner them with meals can offer a truly different concept. “Cross-promoting a soft drinks menu with food by putting suggestions alongside meals will allow a consumer to see a focus that currently comes second to alcoholic options. “Operators could even consider tasting evenings or offering a non-alcoholic ‘flight’ to pair up for multiple courses. It’s certainly a fun and engaging way to promote a soft drinks offering.”

Fentimans A recent market report by botanical brewer Fentimans revealed almost twothirds (65%) of British consumers are trying to lead a healthier lifestyle. To meet demand for healthy drinks, the company has chosen three of its top-


selling flavours to launch a light soft drinks range that is “lower in calories without compromising on flavour”. The range includes a lower-calorie version of its iconic Rose Lemonade, plus Gently Sparkling Elderflower and Sparkling Raspberry. The drinks have been created using the same botanical brewing method Fentimans has been using for more than 100 years, with milled ginger root and selected botanicals fermented for seven days.

“We have worked long and hard on the new recipes to ensure we can deliver a lighter option of our classic drinks, with no compromise on flavour” Fentimans marketing director Andrew Jackson The new recipe for the Fentimans “light” range contains less than 60 calories per bottle, while sugar has been reduced to 4.8g per 100ml and there are no artificial sweeteners. Fentimans marketing director Andrew Jackson says: “We know a growing number of our audience are increasingly looking for great-tasting ‘light’ drinks with fewer calories. Great flavour is our number one objective so we have worked long and hard on the new recipes to ensure we can deliver a lighter option of our classic drinks, with no compromise on flavour.”


Frobisher’s head of brand Jessica Waller says: “If we find ourselves enjoying continuing sunshine, barbecued meat is well paired with rich and full-bodied drinks so try a chilled glass of Sloe & Raspberry Cordial with still or sparkling water, which is just the right side of tangy to cut through rich meat. “Apple & Raspberry Fantastical Fusion is a lighter option with barbecued pork, while orchard fruit such as apples pair perfectly with fattier cuts of meat. “Smoky but still delicate, barbecued fish pairs best with lighter drinks that offer a dry finish. If prawns are on the menu, Ginger & Juniper Spectacular Sparkler is ideal. “White fish and squid cry out for the tartness of citrus so I recommend Orange & Lemon Spectacular Sparkler over ice or a bottle of grapefruit juice topped up with soda water.”

Lyre’s Lyre’s is a range of alcohol-free spirits and liqueurs distributed in the UK by Proof Drinks. The company has taken on the task of “crafting the impossible”, and its diverse portfolio already boasts 13 non-alcoholic spirits and liqueurs, including gin, whisky, rum, dry and sweet vermouth, absinthe, triple sec, amaretto and coffee liqueur, with “more in the pipeline”. The range took more than three years of development using a library of 6,000 extracts, essences and distillates, with some variants having more than 100 generations of product. Lyre’s has recreated the “tell-tale burn of alcohol” and delivered the “closest possible match of bouquet, taste and palate-weight to everyone’s favourite tipples”. Bartenders can simply reach for a different bottle when making a mocktail. Lyre’s design was inspired by the Australian lyrebird, the world’s greatest mimic. Lyre’s chief executive Mark Livings says: “We didn’t want to craft original flavours that were botanical. We wanted to get as close as possible to those timetested and universally loved flavours of original spirits.”





A landmark moment


The launch of a sector deal for tourism will mark a tremendous moment for the whole industry, says UKHospitality chief executive Kate Nicholls

ollowing a wonderful summer of restaurateurs, theme-park sport full of fantastic moments workers, bed and breakfast that will live long in the memory, owners, museum guides, it’s worth noting summer 2019 will bar teams and waiting staff. also be remembered for another landmark. More than 80% of tourism The launch of a sector deal for tourism jobs are within hospitality so this marks a tremendous moment for all of deal should result in a clear positive us in the hospitality, tourism and leisure impact on our ability to recruit and retain industries. The deal will be critical in staff. Our team members are not only changing the sector’s perception within the cornerstone of the sector’s consistent government and influencing broader growth in recent years but also form one public opinion – hospitality has been of the fastest-growing segments of the UK acknowledged as a key contributor to the labour market. UK’s future prosperity. However, we know recruitment The sector deal is an agreement with continues to pose a huge challenge government to prioritise and support the across the hospitality sector, principally sector as a driver of economic growth because the pool of available labour is and job creation. It is an important vote shrinking and the perception persists our of confidence in the sector, providing a sector doesn’t offer long-term, sustainable long-term vision that reflects the skills careers. To tackle this, the board will and innovation we see every day, and will oversee a significant increase in the ensure we continue to thrive in a highly number of approved apprenticeships, competitive global market. Put simply, aiming for 30,000 a year by 2025, and a the deal is a game-changer; moving mentoring programme to support 10,000 hospitality up the agenda and increasing employees to enhance their careers and employment opportunities. ensure they remain within the sector. A key element of the deal is the The deal will introduce tourism creation of a Hospitality and Tourism zones, which will unite businesses and Skills Board, of which UKHospitality organisations to establish a cowill be a leading member. The ordinated strategy for growth board will aim to promote in their local economy and our sector as a career of increase off-season visits. choice – supporting and SMEs in these areas will cost of industry-led funding a £1m industryreceive targeted digital led skills and recruitment skills training and be skills and recruitment campaign that will look offered practical guidance campaign that will to boost the pipeline of in management and look to boost the talent for people of all leadership through the Be pipeline of sector ages and backgrounds. The Business programme. talent The board will build on From a hotel sector the long-standing partnership perspective, the deal means created with the Department for the UK will continue to be Europe’s Work and Pensions through the Hospitality leading hub for hotel investment. The Works campaign so even more people will industry is committed to build more than be able to emulate the millions of others 130,000 bedrooms by 2025, with the that are thriving as a result of the wealth majority outside London. This will mean of opportunities a career in hospitality and the benefits of tourism are not only felt tourism offers. across the whole of the UK but will be vital The recruitment campaign will feature to attract valuable international visitors in career showcases in sector hot spots. a post-Brexit environment. Importantly, it will be localised so employer This sector deal backs the small needs in different areas are considered to businesses, entrepreneurs and innovators reach potentially marginalised employees. within hospitality. It sets out an ambitious This includes those in rural areas who agenda that will deliver increases in might find it harder to access education productivity and investment that benefit and employment. local economies across the country. It Tourism and hospitality are inextricably brings together a coalition of government, linked. It’s a rich and diverse employment businesses and trade associations with a eco system including travel agents, shared ambition to improve the industry’s




performance and help it fulfil its potential and deliver wide-reaching benefits. The team at UKHospitality has worked tirelessly with industry partners to ensure the government understands the importance of our industry. We look forward to building on this partnership, with more positive action to secure the future workforce for our sector.

MP skills challenge During the past few months, several member businesses across the country have supported our direct campaigning work by hosting MPs in their venues for a series of “skills challenges”. These challenges are built on the premise of busting the myth that hospitality jobs are “low-skilled”. Following findings by the Hospitality Workforce Commission 2030, which UKHospitality established last year to identify the sector’s strengths and weaknesses and give employers an opportunity to communicate this to Parliamentarians, it remains crucial we promote the full range of careers. From Newcastle to Kent and across to west Wales, MPs have been given crash courses in skills such as cocktail-making, brewing, barista-style coffee serves, pizzamaking and perfect pint pouring, with the aim to educate those in Westminster about the diverse skill sets required to run a modern, successful hospitality business. The response so far has been encouraging and UKHospitality has been contacted by many more MPs hungry to take part in these challenges and show their support for a sector they recognise as hugely important to their constituents. If you are interested in hosting one of these MP skills challenges, email UKHospitality policy executive Richard Clifford at

Kate Nicholls is chief executive of UKHospitality


TEN GLOBAL MEGA-TRENDS James Hacon reveals ten factors that are having a huge impact on the hospitality sector

X DIVERSITY AND INCLUSION The statistics around diversity in business are shocking, with only one in 16 board members of FTSE 100 countries coming from a black, Asian or minority ethnic background. Meanwhile, women make up less than one-third (29%) of directors on the FTSE 100. Yet research by management consultancy McKinsey shows companies in the top 25th percentile for gender diversity on their executive teams were 21% more likely to experience above-average profits, while companies with more culturally and ethnically diverse executive teams were 33% more likely to see better-than-average profits.

While companies may be slow to change their all white, middle-class, middle-aged male boardrooms, the general population isn’t. Diversity and inclusion came to the front of the public psyche with the #metoo movement building momentum throughout 2018. Far from a flash in the pan, the movement has fundamentally shifted the perception of what is acceptable behaviour by leaders, with many people using their spending power in response. One example was the boycott of the Dorchester Collection following new laws in Brunei against gay and extra-marital sex. Meanwhile, many companies are actively delivering products and services specifically designed for diverse audiences. Examples include women-only private members’ club AllBright and Chanel, which has developed a range of make-up for men. Unfortunately, while many people move forward some are left behind in the Dark Ages – as I write this article Donald Trump is under fire for targeting and attacking congresswomen based on race.


#MeToo rally in New York, December 2017


Sir David Attenborough told us climate change was humanity’s “greatest threat” and, last year, the world finally stopped and listened. While responsible consumerism is much more than simply climate change, this type of message is encouraging the global population to reconsider their options and challenge “Customers are their everyday choices. intentionally Customers are intentionally purchasing products purchasing products and services that have minimal or and services that no impact on humans, animals have minimal or no or the environment, and don’t impact on humans, seek to exploit them. With animals or the information at our fingertips and more readily accessible environment” than ever, it’s becoming easier to research choices. Sales of ethical food and drink has increased 43% during the past five years, with the market worth more than £8.2bn. In 2018,


Insight Nielsen found almost two-thirds (66%) of consumers are willing to spend more on a product if it comes from a sustainable brand. The hospitality industry has started to respond by removing single-use plastic, starting with straws and cups. Although a small step, it represents a considerable consumer-driven movement – the BBC estimates the UK uses 8.5 billion plastic straws a year.

Iceland’s Christmas 2018 advertising campaign was named the most “powerful of the season” by brand strategy consultant Kantar Millward Brown. For the No Palm Oil campaign, Iceland repurposed a Greenpeace film to raise awareness of rampant deforestation caused by the extensive use of palm oil, which is used in crisps, margarine, vegan cheese and many others. While consumers connected with the campaign, Iceland positioned itself as a brand driven to eradicate palm oil from its offering. This drove strong affinities across brand love and relevance – metrics that are usually hard for brands to move.

X EXPERIENCE OVER THINGS Recent psychological studies have proved that in terms of happiness and well-being, spending money on experience is far more rewarding than buying things. Add to this the recessions of the past decade and it’s easy to see why younger generations see greater value in memories rather than items that can be taken away. This mind-shift brings with it a sentiment that it’s better to be happier with less and love the life you have. The Independent undertook research that suggested any salary beyond £50,000 fails to increase happiness. This isn’t just a change in purchase behaviour but also culture. Seeking more happiness, these generations find focusing on experiences rather than purchasing things enriches their lives. With this trend we have seen an increase in dining out of home and a drive towards all thing experiential, which are both driving growth in our sector, especially with the innovative diversification of immersive leisure and competitive socialising.

X WE ARE WHAT WE EAT There’s a tug of war between food eaten for the experience and food eaten for fuel. The experience allows consumers to treat themselves and occasionally indulge in unhealthy food. Providing fuel for the body means being more conscious about what goes into our bodies and how it will help us in our everyday lives. The most significant shifts have been reduced alcohol and meat consumption. In recent statistics, one-third of Britons have stopped or cut down their meat intake, with an increasing number citing health and environmental factors rather than animal welfare. One in five UK adults now claim to be flexitarian. This movement has led brands to provide health benefits as part of their marketing communications – and 2019 has been the year vegan options have exploded on to menus. The cut in alcohol consumption has seen a flurry of non-alcoholic beers hit the market, with many operators are adding lower-alcohol options to their range.

X CONSTANTLY CONNECTED It will come as no surprise to read the number of adults owning smartphones leapt from 17% to 78% in a decade. Recent statistics show almost one-third of UK adults feel lost without an internet connection. The average consumer spends 2.5 hours a day on a smartphone, with this stimulus having both a negative and positive effect on our sector. On the one hand it’s freeing the population to spend less time behind a desk and more time in venues, working on the go and increasing productivity. It is also ever more convenient to order food. This connectivity also means information is more easily accessible, making consumers more informed than ever and, as a consequence, more demanding. It can also mean everyday interactions become less meaningful within family and friendship groups but the saving grace for hospitality is there’s evidence to suggest we turn to venues for “in-real-life” experiences, which become ever more important. For businesses, as the internet of things draws closer there will have to be a balancing act between offering improved customer experience through technology and providing security, privacy and a manageable frequency of interaction. As digital and virtual reality experiences continue to improve, there will be ever increasing demands on the quality of a hospitality venue’s experience to encourage people to switch off their device and stay engaged.

X SOCIAL STATUS In a world where social media is a part of consumer’s everyday life, Instagramability adds an extra layer of value to customers by allowing the brands they choose to become an extension of their online personality. People are increasingly making decisions based on these factors. A recent study showed two-fifths of millennials choose their holiday destination with this in mind. In our sector it reinforces the fact food isn’t the only product a restaurant offers and the exterior and interior design is becoming a bigger piece of a company’s strategy to pull more customers. It will come as no surprise that more than 70% of millennials take a photo of their food before eating but did you know one-third of this generation actively avoid restaurants with a weak Instagram presence? Members of Generation Z are continuing the same trend but see messaging apps such as Snapchat replace the public personas on sites such as Facebook or Instagram. This generation has equal demands when it comes to the visual aesthetic of the places they choose to eat and drink – and evidence suggests they’ll dine out 20% more than millennials. ▲ AUTUMN 2019 PROPEL QUARTERLY


Insight This in-store robot in Japan can describe a product and communicate between sales staff and customer

X SAFE AT HOME The idea of staying home rather than going out has inverted slightly from the traditional model, with a decrease in millennials and Generation Z drinking out of home versus an increase in dining out among baby boomers. A Mintel survey revealed more than one-quarter (28%) of “young millennials” prefer drinking at home, with the key reasons surrounding controlling alcohol intake and saving money. A number of respondents cited a desire to drink in a relaxing environment rather than a crowded venue. Add to this the resurgence of dinner parties as cool among the young and the “Netflix and chill” alternative to date night and you start to see a real trend emerging. This is perhaps the driving force behind a 73% increase in household spend on takeaways in the past decade.


X CONTINUED RISE OF TECHNOLOGY Recent studies estimate 20 million manufacturing jobs could be replaced by robots by 2030. We are seeing continued automation in various industries, ranging from automotive to data input, and our sector has its fair share of technology startups hoping to maximise this movement, including robotic bartenders on board Royal Caribbean International cruises to automated kitchen appliances and robot waiters. A few years ago IBM published a report suggesting chefs could be one of the top ten jobs replaced by robots. While this kind of total takeover might seem a while away and there are questions over whether the human touch will remain sacrosanct in many kitchens, technology is undoubtedly having an impact on the entire sector. Last year almost 50% of operators said they planned to increase spend on back-of-house software, up from 25% the year before. Two-fifths (40%) of operators said employee productivity was the top reason for increased restaurant technology investment – presumably with recruitment challenges a considerable driver. On the consumer side, we are seeing customers become increasingly willing to use technology to improve their experience or speed up service. In a recent survey, more than three-fifths (61%) of diners agreed hand-held tablets improved their restaurant experience, with two-thirds (67%) of restaurants finding the same technology enhanced business efficiency. One positive by-product of automation within other industries is it could help to bridge the employment gap the hospitality industry currently faces. McDonald’s Hong Kong

McDonald’s has invested heavily in technology in the past few years to keep on top of the market, particularly in its acquisition of Dynamic Yield. While ordering kiosks have been a welcome addition for customers, allowing a smooth and quick order and collection service and cutting wait times, the company is leveraging the technology to use big data to its advantage by making recommendations based on customer preference, speed of service, equipment and team capacity.


It’s estimated two-thirds of the global population will live in urban areas by 2050. This will have an impact on food distribution, sourcing, models of production, delivery and at-home cooking – which will all have an impact on eating habits. Kitchens may look to be substantially more compact to maximise the amount of living space developments can fit within a specific location. This is likely to have a knock-on effect on dining in, pushing consumers to dine out more and even looking to shared kitchens for hosting, which is something we are already seeing in build-torent apartment models. When considering the “Delivery will continued trend towards also continue to remote working, the pressure on space is likely to drive many increase as cooking more subscription models for equipment fails to fit using space in venues, testing in smaller kitchens” the traditional commercial model of wet-led venues. We have already seen BrewDog launch this concept in its venues, while Citizen M hotels have started to charge a “day fee” for using facilities in its lobbies. Delivery will also continue to increase as cooking equipment fails to fit in smaller kitchens. Linking back to responsible consumerism and the increased trend of localism in how we source food, we’ll see a potential conflict between the desire to grow produce vertically versus its environmental impact and space constraints.

X AGEING POPULATION Scientists are predicting human life expectancy will reach 125 years by 2070 as living conditions improve. By 2100, the number of over-60s is set to increase more than 300%. This population model will fundamentally change societies, with increases to retirement ages, improved health in later life and a greater number of people in the workforce. We are already seeing the needs and wants of retirees changing and we’re likely to see more brands respond with specific services to meet their demands rather than innovation driven by the youngest generation, which is often the case today.

James Hacon is managing director of Think Hospitality, which advises multi-site brands on maximising growth opportunities and invests in early stage concepts with a bright future


Advertising Feature

Gen Z - how generational changes are influencing the hospitality industry When it comes to technology, the attitudes across different generations can cause quite the divide. In hospitality, business owners can often be caught up thinking of how they prefer to work, rather than how those around them would prefer to work.


ith Gen Z making up 30% of our customers and workers, their expectation levels are forever growing when it comes to using technology, as are the 30% are Millennials whose thought process is along similar lines. Rather than creating a war of the generations, though, wouldn’t everyone benefit from taking a moment to understand each other and find a more efficient and productive way of working and servicing customers? A recent survey, commissioned by Access Hospitality, asked hospitality operators around the UK about the challenges facing the industry and the impact on their business operation. The results highlighted the importance of mobile technology in a fast-paced environment, not least with the rise of mobile-first Millennials and Generation Z influencing the traditional trading models with their sense of community and adoption of mobile systems.

Reservations – easy as 1,2,3 Making the visit as easy as possible, as enjoyable as possible and encouraging Millennials and Gen Z to return on other occasions should be a top priority for operators, and they need to act now if they’re to be at the forefront of this generational shift. Not only do the younger generations not want to pick up the phone but there’s a level of expectation that now

through to the POS is having allergen exists that they can make a reservation at information to hand ensuring servers the touch of a button. are giving accurate information which As online bookings start to overtake provides real comfort/confidence telephone bookings and with to not only customers but the success of Reserve with employees as well. Google is a clear example of “Encouraging The most effective way diners wanting the booking Millennials and to react to the influence process to be as quick Gen Z to return on of Millennials and Gen and easy as possible, with other occasions should Z in the hospitality potential customers being be a top priority for sector is to make sure able to book directly from operators, and they that there is effective Google listings or Google need to act now” integration between Maps without having to EPoS, reservations, cashless leave the page. payment and loyalty apps. The future of order taking Seamless integration and links – fast, effective and informative to website and social media platforms Lots of hospitality operators still favour the together with Reserve and Enquire with pen and paper method of taking an order Google will make sure that your venue is in however it’s naïve not to think about the prime position to maximise the potential of benefits of having a tablet system from such a significant customer base. the server’s perspective as well as the information that can be provided to the customer at the point of order. Want to know more? Download our Consider that a lot of millennials can’t Hospitality Trends Report 2019: write as fast as they can use a touch screen – so the objection that it’s slower Hospitality_Trends_Survey.html to use a tablet doesn’t really cut it. Smart tablets/POS can not only prompt servers Telephone: 0845 340 4542 to give more information about their dishes, but prompts can be set up to give recommendations of what dishes go with mains, which wine to pick etc. From an operator’s perspective, however, one of the huge benefits of feeding information from the kitchen AUTUMN 2019 PROPEL QUARTERLY



Jon Lake

Chopstix going against the flow

Mark Wingett talks to Chopstix managing director Jon Lake, who has overseen a quiet evolution of the business, building on the foundations put down by its founders and getting it into a position for significant growth in the years to come


ometimes they say the best ideas happen by accident and while it may be strange to say so, Chopstix can thank Pizza Hut for an element of its success. Set up by Sam Elia and Menashe Sadik more than 15 years ago, the first Chopstix unit in Oxford Street (a site they acquired from Pizza Hut) was going to be a combined pizza slice and noodle bar, a throwback to the first business Elia and Sadik had set up in Camden some years earlier. It was only after signing the lease on the unit did they discover that a restrictive covenant prevented them from serving pizza in the unit so it was then they decided to focus solely on noodles and Chopstix Noodle Bar was born! Over the next 15 years Elia and Sadik sought to exploit a gap in the market for Asian quick service restaurants and built Chopstix’s market presence to 75 units in addition to which came the group’s first corporate deal to acquire the nine-strong Yangtze brand to provide further growth opportunities and scale. While they were very focused on expanding the business they also knew the complexity of Asian cooking and operations could be an inhibitor to significant scale. The entrepreneurs therefore invested significant money and effort into simplifying recipes and processes without compromising on taste – something they still hold dear today.


In early 2018 they made a decision to seek some assistance to help scale the brand and operations and appointed Jon Lake as managing director to work with them. During the past 18 months the work they and the team have put in is starting to pay off in terms of improved offer, store design and, most importantly, sales and profit. This work is backed up by the numbers. The company recently completed its financial year end to 30 April 2019, managing to grow sales from £24.2m to £29m, while overall profit increased from £2.2m last year to £2.6m. Lake's background includes operational and development roles within multinational organisations such as Singha, Whitbread, Merlin and Punch and 15 years in corporate finance for Deloitte where he was director of mergers and acquisitions specialising in the licensed retail sector. He says: “Sam and Menashe had built a fantastic business that had national presence, but yet I felt was a bit of an unknown quantity to the wider sector. It has also grown very quickly in a short space of time. We needed to focus on the inherent strengths of the business and then build a team, structure and process around that to really capitalise on them.”


Feature Chopstix Bull Street

Chopstix Westfield Lake says: “Sam and Menashe have been extremely supportive in building the new team and have welcomed the challenge new Lake adds: “The key strengths of the business are what we remain people and systems can provide. Darren has brought great energy relentlessly focused on. Firstly, our position as a national Asian quick and discipline to Chopstix and has built an operations team that is service restaurant brand means we don’t have too many competitors. really starting to make a difference. He has established new EPOS We are unashamedly mass market and welcome the opportunity and management systems to provide improved business insight, to sit alongside other national brands such as KFC, Burger King, safety and margin growth. Jimmy has been with the business for Subway and Greggs that provide great food at everyday value and many years and has been instrumental in building the business we we believe our proposition is entirely complementary to them. If have today. He relished the challenge of integrating the Yangtze we can replicate even a fraction of the scale that those brands have acquisition into the overall business and has done so extremely achieved, then we’ll have done well!!” successfully. Rob is the brand’s ambassador and has been Lake continues: “The second key strength is our the driving force behind our ‘brand elevation’ project, compelling economic model – high margins and which was launched in our new site in Westfield low capex delivering great returns. Our final “It was a Stratford.” The brand’s evolved look includes the key strength is simplicity and is something necessary about which we obsess, whether that is in our move from traditional bain-marie to display the process the recipes or cooking methods, new technology dishes, to the use of woks. It has also revamped business had or equipment, supply chain efficiencies or its screens and its packaging and introduced operational delivery. This allows us to provide new uniforms. “All new sites have been done to go through, a fresh, visual experience but with tremendous in that way and these upgrades will now be and one fully speed of service, typically in under a minute. incorporated across the existing estate via a supported by This is encapsulated in our key customer ‘sparkle’ refurbishment programme,” says Lake. the founders” proposition of ‘Faster, Fresher, Tastier’.” Estate review Lake began by refreshing the management The brand has also consolidated its operations team, the company’s estate and re-evaluating the and shed some sites. “It was a necessary process look and feel of the brand. He has brought in a new the business had to go through, and one fully supported finance team, recently strengthened further by the appointment by the founders,” says Lake. Part of the review of the estate of Mark Carrick, ex-chief financial officer of Comptoir Libanais. was assessing the future of more than 20 individual sites that Darren Traynor, ex-Greene King and Orchid Pub Group, heads over the years had been opened under one-off licensing up the Chopstix operations team, Jimmy Arifaj leads the Yangtze agreements. Following the end of the group’s previous financial business and Rob Burns, formerly of Boparan, leads the charge on year, it reviewed the trading performance and carrying value marketing. It was also important to Lake that some of the original of almost 25 sites held under licensing arrangements and team were involved in the process of moving the business forward disposed of these outlets and the related group companies as much as possible, careful that the heritage and entrepreneurial to a third party for nil consideration, with an impairment of culture of the brand was maintained, while the new systems and £1m recognised within this period. “These were quite old ▲ processes were incorporated.



Feature units in tertiary locations,” says Lake. “Historically the business had done one-off licensing agreements with local individual operators. When I arrived I took a look at the business and said this isn’t what we should be doing long term – it’s a difficult thing for us to control and not a proper franchising agreement – so we took the decision to move them on, but we are actively now looking for new corporate franchise partners to join us.” At the end of the most recent financial year, the company operated 41 branded Chopstix restaurants, with an additional 18 operated under franchise – ten with Applegreen in Ireland, six with Welcome Break in motorway service areas in England and Scotland, and two in Germany with Westfalen. The company also owns sister brand Yangtze. The company plans to open ten stores in this financial year as well as undertaking a large refurbishment programme. Lake says: “Our strategy is to continue growing the business for the long term, hopefully increasing by roughly ten sites per year. We’ve now set ourselves a target of £40m in sales by the end of 2020; a plan we have christened ‘Chopstix 40/20’. This strategy will be underpinned by a continued investment in infrastructure with new people and systems, allowing us to drive improvements throughout the business.”

“We have a lot of work still to do with the opportunities and improvements in the existing business but we are also acutely aware that in the current market we must remain nimble and able to react when something strategic arises” For Lake, the proof the foundations built on over the past 18 months are working continues to come through the group’s sales figures, with like-for-like sales on average up 10% ahead of last year in the year to date. He says: “Some of this growth may be due to the hot weather and Fifa World Cup that we experienced last year but I think this only explains part of it. With new products such as sweet chilli prawn and stir fried beef and broccoli and improved quality of chicken we are driving a lot of these sales improvements ourselves.”

Refurbishment rewards Since the start of 2019, the company has opened sites under its core brand in Intu Nottingham, Birmingham, Bristol Cribbs Causeway and Earls Court. Lake says: “Most new sites have started very well and exceeded our own expectations. In addition, we have refurbished Woking and Meadowhall Sheffield Yangtze. Both these sites have achieved well in excess of 10%

Yangtze Meadowhall Sheffield


Chopstix founders Sam Elia and Menashe Sadik sales growth post refurbishment.” A further seven sites are anticipated to be refurbished over the next six months. A site has recently opened at Silverburn Glasgow while outlets at Southampton’s WestQuay Centre and the new Extra motorway service site at Skelton Lake near Leeds are in the pipeline. At the same time, the business is currently trialling new products – ahead of a possible nationwide launch – including a green Thai tofu curry, which Lake says “came out top when we invited a dozen of our vegan customers to a focus group/cook off in our Oxford Street store” and a “Shake’n’ Take” bag, which comprises salt and pepper potatoes and spicy chicken. Lake adds: “People like the simplicity of what we do, so we are seeking to retain that while also trying to give people a bit more choice.” The group’s growth strategy will be facilitated by a new £5m debt facility from Metro Bank, which was completed in late July. With consolidation already taking place across the quick service restaurant and grab-and-go sector, Lake believes Chopstix will increasingly find itself in a good position to play a significant role. He says: “It is too soon at present to say what that role will be, but with the Yangtze acquisition we have proven we can move when the right opportunities come along. We have a lot of work still to do with the opportunities and improvements in the existing business but we are also acutely aware that in the current market we must remain nimble and able to react when something strategic arises. We believe there are still significant opportunities to expand both brands, especially Chopstix, and to further change perceptions about what they offer, while continuing to cement our position as the leading Asian quick service restaurant brand in the UK.”

Chopstix Bristol Cribbs Causeway


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Second chances Glynn Davis looks at companies that are giving prisoners a way to build their lives and a new career through training and employment opportunities


their ethical stance and more than onehen visiting the workshop fifth (21%) on charity work undertaken by of luxury goods brand Elvis the brand. & Kresse in the leafy village of Tonge in Kent, I asked Coffee company Redemption Roasters co-founder Kresse Wesling how sales were is among those appealing to this new going? This most obvious of questions mindset by training and employing was batted away as if it was something she young offenders as roasters and baristas. didn’t wish to discuss. Redemption was a regular coffee company Her team crafts luxury goods from until it was approached by the Ministry of waste materials, including old fire brigade Justice, which wanted to know if it might be hoses, but she doesn’t determine the interested in helping reduce reoffending business’ success by the obvious measure rates among youngsters by introducing of increased sales and profits, she prefers barista training in some of its sites. to look at the amount of produce it saves This prompted a restructure of the from going to landfill and the money business, with the new model proving it gives to charities, including The Fire extremely popular at HMP Aylesbury, Fighters charity. where most other training schemes involve Any fool can see these two metrics heavy manual or construction work. The grow on the back of increased roastery now roasts two tonnes of sales and profits but Wesling ethically sourced coffee beans refuses to consider revenue a week and is constantly “If foodservice as the primary motivator oversubscribed, not to companies don’t have for her company. She mention it has a great a purpose or mission has turned things on its reputation at the prison. beyond simply racking head and created Elvis up sales and profits, & Kresse as a purposeperhaps it’s time they driven business rather took a step back and than one motivated by traditional drivers. considered the Elvis & Kresse wider picture?” isn’t alone in its stance – a growing number of foodservice businesses are also recognising there has been a change in appetite of younger customers, who demand companies address sustainability issues and introduce ethically friendly initiatives. KAM Media research found almost half (48%) of Generation Z base their brand purchasing decisions on a company’s impact on the environment, while more than two-fifths (44%) make choices on



As other employers of ex-prisoners such as Timpsons often note, by investing in this niche employment market the big plus is you get a great deal of loyalty in return. Redemption Roasters has also tapped into the willingness of landlords and leaseholders to offer the company favourable rates and a public willing to invest in a good news story. The company now operates four coffee bars in London and has a rapidly growing roster of corporate clients for its wholesale business. Clearly it has to offer great coffee because all the corporate social responsibility value and goodwill in the world wouldn’t make people buy it! This is the same situation with Liberty Kitchen, which has been part of street food specialist Kerb’s food truck incubator programme. I found its truck parked at Canary Wharf serving delicious meat, vegetable and vegan balls in tasty sauces – but these weren’t just appealing because of the taste. Liberty Kitchen is a not-for-profit social enterprise working in Pentonville Prison to create these balls of goodness and, in doing so, is achieving its mission of “giving men a chance to change by providing training and relevant qualifications, jobs, opportunities and skills for life”. If foodservice companies don’t have a purpose or mission beyond simply racking up sales and profits, perhaps it’s time they took a step back and considered the wider picture? Perhaps they need to consider adopting some of the – less obviously profitable – elements that are becoming increasingly important to younger consumers?

Glynn Davis is a leading commentator on retail trends

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Guest feedback is the perfect conversation starter HGEM’s Managing Director Steven Pike discusses the ways in which operators can show their guests how much they really value their feedback


e operate in a feedbackhungry industry. All successful operators continuously reflect, learn and adapt in response to feedback from their guests. But we need to ensure that feedback doesn’t just become a boxticking exercise that leaves guests numb and not knowing if their comments are ever going to be acted upon. Guests are constantly being told by operators that “we value your feedback”. While this might be the case, it can feel like an empty sentiment if they don’t get any response or reaction from it. We don’t want to reach a point where guests pass on submitting their feedback having deemed it a pointless exercise. So, what can we do to make feedback surveys more engaging for guests and of greater value to operators?

“We don’t want to reach a point where guests pass on submitting their feedback having deemed it a pointless exercise” you want to communicate with your guests and preserve what’s unique about your brand expression. Who said that you have to have a generic star rating? You can choose icons that fit your brand. If you’re a burger joint, use

Elevate brand engagement Collecting guest feedback doesn’t need to just be a ‘process’; an obligatory way of showing guests that you’re taking on board their comments and constantly adapting to what they want from the guest experience. It can be so much more personal than that, for both you and your guests. Think instead about how you can continue the experience once the guest has left. Immerse them in your brand in the same way that you would on your website before the visit. Use rich imagery and language that chimes with the way




patties in buns instead. Or scallop shells if that’s your signature dish. It might seem like only a minor detail, but it’s all about making guests feel that you’re still invested in them, rather than just serving your own needs.

Find out about the food Food is often at the heart of a guest’s experience. So, make it easy for them to rate and comment on what they were served. There are various ways to do this, such as image selection and predictive search. While you’re asking guests to rate their food, capture their thoughts on value for money at the same time, as this will help you to refine dish pricing. Guests can upload their images, too. People love taking pictures of their food – social media is to blame for that. Use the trend to your benefit by encouraging guests to share their dish with you, for good or for bad. Their feedback can then be passed on to the kitchen, who can see for themselves where they might have fallen short of standards; or conversely, exceeded expectations.

Engaging at the table There may be opportunities to capture feedback while the guest is still at the table. Be careful how you do this, as noone wants to have an impersonal tablet put in front of them when trying to pay for the bill. But in some circumstances, it can be used to enhance the engagement naturally at that stage of the experience. A good example is when you know someone has tried a new or experimental dish – this gives the server the opportunity to explain that it’s new and that the kitchen would really value their thoughts.

At-table surveys need to be configured slightly differently to make them really easy for the server to capture feedback and restart for the next guest.

Make your surveys dynamic If a survey should be about engaging with your guests and follow the lines of a conversation, then it should also adapt to different client needs or circumstances. You don’t have to ask the same questions of every guest. By using branching questions, you can adapt the content of the next question depending upon their answer. You can also take account of how much time or attention the guest has by providing different exit points. Some only have time to give you a couple of sentences; others will be happy to provide a more detailed series of ratings. Either way, if your survey is designed to manage a range of such scenarios, then you will be able to capture as much or as little feedback as people are prepared to share.

Make changes and report back to guests It goes without saying that it’s pointless collating guest feedback if you’re not going to do anything with it. By feeding your results into a modern reporting system, you get to pick up the patterns that deserve your attention and make the kind of changes that will lead to better guest reviews. But there are plenty of opportunities to continue your engagement with the guest. If someone has had a poor experience, make sure you get alerted, so that, if you have their contact details, you can make

amends rapidly. When this is done well, an initial negative experience can be turned into positive word-of-mouth. Where you’ve made more general changes in response to feedback, perhaps you can share this with guests, either on the survey site or your website – along the lines of “you told us what you wanted to see, and this is what we’ve done”. That way, regular guests feel they have a stake in, and influence over, the evolution of your offer.

Continue the conversation in other channels Naturally, this one applies to guests that you know are happy – your survey should hide the opportunity from those who are not. But many people like to share details of the best experiences on social media or review platforms; it helps to make them and their lives appear more interesting. So be part of it, by providing making it easy for your guests to reproduce their comments on Google, TripAdvisor, Facebook or other channels.

Integrate with CRM and other systems As well as inviting feedback through pointof-sale communications or cards, you can also tap into existing communications. For example, if the guest has registered

to use your wifi, or made a booking, you should be able to get the supplier of that system to generate a post-visit invitation email – this can contain information such as the location and date so that the guest doesn’t need to enter it. If you have a piece of data about the guest that your CRM will recognise (such as a Guest ID or an email) then, provided you capture the guest’s consent, you can feed useful information such as an NPS rating and some comments back into your CRM for storage against that guest’s record. This then allows you to adapt marketing communications to guests based on what you know about their previous experiences.

Finally We believe that surveys should be a way of continuing the conversation, not cutting it dead. In any other walks of life, silence after disappointing someone is the worst thing you can do. Why should it be any different in the hospitality industry? Most guests will be prepared to give you a second chance if you genuinely show that you’ve learnt from your mistakes. Of course, some operators are already great at following up on feedback. But they still feel like an exception to the norm. It’s time for us all to really show guests how much we value their feedback. ■

To find out more about how you can put all this into practice for your brand, go to: or give us a call on 01225 470999 AUTUMN 2019 PROPEL QUARTERLY


Feature Insight

Mitigating senior hire derailers Chris Edger identifies a threat to the effectiveness of new leaders in their crucial first 120 days


n my last article I outlined, on the basis of research for my new book Coaching Senior hires – Transitioning Potential into Performance, the “big six tasks” external senior hires face when moving into a new organisation. To recap, these tasks were achieving strategic clarity, operational grip, cultural integration, team cohesion, stakeholder alignment and personal impact. I argued senior hires had to successfully address these mutually interdependent tasks quickly – with the help of a “cognitive-boosting” transitional coach if necessary – to avoid outright failure or severe delayed performance. However, during the course of my research for the book respondents – particularly the ten smart senior hires from our sector – I continually referred to a series of “generic derailers” that threatened their effectiveness in those crucial first 120 days. What or who were those derailers? Furthermore, what problems did they pose and how did successful senior hires mitigate their impact? I identified six derailers – the six R’s of interference – that were commonly cited by senior hires, the mitigation of which is crucial to senior hire acceleration in their early days.

“Many senior hires had underestimated or misread the hidden agendas, political motivations and protective self interest of their new environment”

Dysfunctional RELATIONSHIPS: The most commonly cited issue by senior hires was tricky and bothersome



relationships with crucial stakeholders (particularly peers and bosses) in the early days of their tenure. Why? Many senior hires had underestimated or misread the hidden agendas, political motivations and protective self interest of their new environment. Naively arriving on the scene expecting collegiality, they were met by depressingly unhelpful (if not sabotaging) behaviour. Their solution? Mature senior hires, expecting this behaviour as a matter of course, worked on forging a few solid alliances and advancing win-win solutions (increasing sales or reducing costs) that would mutually benefit both parties.

Stubborn RESISTANCE: Often the senior hire had been parachuted in to fix functional or operational issues over the heads of an existing cadre of managers. They now had to galvanise a team that harboured a degree of ambient resentment and feared for their jobs (realising newbies often bring in their own people). The smart senior hire’s solution? Turn resistors into advocates by generating trust. In their early days – with their actions judged more than their words – they get people onside, creating reciprocity and indebtedness by eliminating the sources of frustration and anxiety that previously prevented them from doing a great job. ▲

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Insight senior hires enter their new role with a pre-determined disrespect for its norms, customs, values, icons, stories and traditions. They are there to make a difference! Unwittingly they fall straight into the cultural trap and – unless they change their tune pretty quickly – are run out of the organisation. The smart senior hire’s solution? Having been appointed to govern in prose by recruiters, they deftly lead through poetry. Smart senior hires assimilate and integrate themselves, praising and respecting the cultural aspects of their new home while sensitively ringing a few subtle changes that challenge redundant orthodoxies.

Collapsing RESOLVE:

Insufficient RESOURCES: Recruiters painted a glowing picture of what lay in wait for the senior but now, having arrived on the scene, reality had set in! They were expected to deliver improbable operational goals with skeletal resources (money, people capability and time). Having been upsold Elysian Fields only to discover a fetid bog, the senior hire has a choice – cry foul or make do and manage. The smart senior hire’s solution? Having zoned in on a few make or break big rocks, they focus their time, cash and people capability on securing quick wins that generate momentum. They realise demonstrating early success is the best way to attract more resources in the future.

Inadequate RECOGNITION: A major problem all senior hires cited was they underestimated how difficult it would be to develop some degree of strategic clarity. Having been appointed to craft a dynamic new direction, they all acknowledged it had taken them longer than they thought to see the wood from the trees, in spite of their due diligence. What they initially perceived to be root issues and remedies often turned out wrong. The smart senior hire’s solution? Surprisingly, do nothing other than watch, listen, inquire and probe as many sources as possible in the early days (customers, frontline operators, suppliers). Their three crucial questions? What should we stop, start or continue to do to be a best-in-class business?

“Smart senior hires assimilate and integrate themselves, praising and respecting the cultural aspects of their new home while sensitively ringing a few subtle changes”

Lack of RESPECT: Senior hires are told by recruiters their new position represents a chance for them to contribute to changing the culture. Flattered



Having been sold the dream job, senior hires often discover they have entered a dystopian nightmare. After a short while in situ they suffer the classic 120-day dip, diluting their personal impact. They question why they took the job in the first place and how they can possibly cope with everything. Their inner conversations are becoming increasingly fraught and immobilising. The smart senior hire’s solution? Having expected the worst they are either unperturbed when they find chaos or pleasantly surprised when they don’t. One thing stands out – smart senior hires exercise a high degree of emotional control and self-management, displaying a high level of resilience under pressure. They acknowledge if they hadn’t wanted the gig they shouldn’t have joined the band. If these are the common senior hire derailers and their solutions, what else mitigates the prospects of outright failure or delayed performance? First, sympathetic chief executives and managing directors who can mentor senior hires through their period of “transition shock”. Second, comprehensive onboarding programmes that give senior hires an honest and accurate appraisal of the “six big tasks” confronting them and which – most importantly – exposes some the derailers highlighted above. Third, targeted transitional coaching that can give senior hires an unbiased “cognitive boost”, accelerating their ability to make an impact in their new role. However, in the end the mere recognition these derailers lie in wait – to a larger or lesser degree – is a useful wake-up call for keen senior hires who are blind to the realities of transitioning organisations. ■

Professor Chris Edger is a lecturer, coach and multiple author on multisite franchising, branded and service leadership





Feature K10 Coleman Street

Raw success

As sushi increasingly becomes the cuisine of choice for consumers and investors, K10, the London-based takeaway concept, finds itself in a unique position. Mark Wingett talks to managing director Reuben Todd about making sure the business is in the best position to take advantage of the opportunities that are set to come its way


euben Todd, the managing director of K10, the London-based, Ian Neill-chaired, sushi concept, suddenly became a lot more popular earlier this year. A brief stint as a regional operations director at Patisserie Valerie in 2017 made sure that when the business collapsed at the end of last year, people he had never met before came out of the woodwork to hear what he had found at the cafe chain. “For a brief spell, it was the first question I would get asked,” he says. “People, including journalists, would look to contact me on LinkedIn to try and get my thoughts. It was crazy.” It could have been different. Maurice Abboudi, executive director of K10, which was founded by Chris Kemper, former development director at YO! Sushi, in 1999, had approached Todd about joining the sushi concept before he accepted the Patisserie Valerie role. Todd says: “At the time Patisserie Valerie seemed like the bigger role and opportunity. I left because I felt there was underinvestment in people to be able to do the job properly. In terms of getting the teams there right, it would have taken 18 to 24 months. And there was some push back on that from head office. Then there was the effect on my personal life as well – the travel and commitment would have been too much.” Abboudi had known Todd from his time at Ed’s Easy Diner, where he had worked when it only comprised six sites and was still led by founder Barry Margolis. Todd had cut his teeth previously



Reuben Todd

trying to launch his own concept at the start of the millennium. He says: “I was very young and very arrogant. It was a Dutch/Indonesian concept franchise in the wrong location and we couldn’t make enough money to keep it going. It broke even, and we got a return on investment within a year but it was a battle. I was looking at going again with something myself but then the Ed’s job came around and I needed to pay some bills!” Todd saw Ed’s grow, with investment from backer Rankvale Capital, at a rate of knots. At one point 23 sites were opened in quick succession in the lead up to and during a sales process, which never materialised. The distraction of that process, and changes in the wider market, saw the business go backwards just as fast, with it eventually going into administration. Todd says: “At one stage there were 16 groups looking at saving it and we were doing two presentations a day for two weeks.” Boparan Restaurant Group eventually acquired the business.

“It reminded me of Ed’s at the beginning, as the owner’s (Chris Kemper) ethos is embedded into the business – the control on quality and the attention to detail”

Attractive proposition Todd and Abboudi had kept in touch and when the former gave in his notice at Patisserie Valerie, they talked again. Todd says: “It reminded me of Ed’s at the beginning, as the owner’s (Chris ▲

Feature Kemper) ethos is embedded into the business – the control on quality and the attention to detail. There might be a few things that might be quirky, but that's what gives it its soul. There was a good young team here as well, which has brought into the brand, and lives for it. I thought I could bring in layer of discipline and some stand-back thinking – ‘ok we are here but how do we get to there?’ I could see the customers actually loved the proposition. It has a good integrity product. Customers are paying for a very good product, where a lot of attention and detail goes into the preparation – there are no shortcuts taken. You can find in places a lot of menu engineering, which slowly erodes what was originally so attractive about that proposition. This is a very hands-on role – take out the chairman and founder directors and it is me, the operations K10 Coleman Street manager and the executive chef.” When Todd joined, initially as increases. You have to be careful not to operations director, at the end of 2017, push people’s budgets too far.” the group had already decided to pivot towards the grab-and-go market. He says: Scope to grow for grab-and-go “It had opened one successful site under the format and the second one had just The company currently operates five opened, but was not generating enough restaurants and takeaways in the City turnover as yet to justify that move. So, of London – in Appold Street, Minster at the start it was case of asking did we Court, Coleman Street, Queen Street and get lucky with the first site under that Fetter Lane. Todd says: “We would like format? Although the restaurants were a further grab-and-go site by the end of doing ok, the business needed to push on. the year. It is a very competitive grab-andThere had to be an element of discipline, go market in the City and it is not going but doing that without destroying the to stop. K10 does everything very well, foundations was the key.” especially in terms of the actual product And what about bringing those new we are handing over but we are awful at ideas to operators with the experience of telling people of what we are doing. Great Kemper, Abboudi and Neill? Importantly, sites are always going to be a struggle to Todd wasn’t daunted. He says: “There was find, but there is scope to double or even a case at first of what everyone wanted triple just in the City with the grab-and-go to achieve against what everyone wanted model. In pockets of high-density office to let go of. Having that experience populations in London and in major cities behind the concept is something to take we can certainly work. We have a team advantage of but I have been conscious, and an infrastructure in place, with some especially after stepping up to managing new investment, to move up to ten sites.” director, that I have to bring my own ideas The business is in early stage to bare.” discussions about raising growth capital. The company now has three standalone Todd says: “At the start of the year, we grab-and-go sites, which Todd, in put an aggressive budget in place his understated way, says are thinking that realistically we “doing well”. The third in would probably fall short of Fetter Lane started off it, but so far everything “Great sites slowly but after a lot of has gone well and we are always going to work it is now doing are spot on. So, if well. He adds: “What we continue on that be a struggle to find, we learned with this track we will have but there is scope to one, which is slightly some impressive off pitch, is that if we numbers to talk double or even triple get the awareness about by the end just in the City with of the product out of the year. Then we there people will can start talking to the the grab-and-go come, which is very right people about new model” encouraging when we investment. It’s about look at new sites. At the getting the margins right moment like-for-like sales and ticking those boxes that for the business are up 8% year to investors want ticked. They want the date, so we are in a good place. The brand to be unique but we need to get restaurants are in positive growth, but they that message out there. Our offer is based are restricted in terms of being lunchtime on real Japanese recipes – great food focused and about how much we can made to order that is not just lying there push them further forward without price under a hot counter. All of those things are



what people want. Food quality is number one, which is something we are very good at. To grow faster, our positioning from a marketing perspective is a bit weak – what does K10 mean? We are doing some customer survey work and we need to progress that this year and get it right for the next site. Aside from that it is getting all the basic stuff right, which everyone knows, but some have got distracted from. We are putting in some formulised training and using this time to get ready for a further roll-out and investors want to know that this is all in place. If we get new investment, we are in a good position to move quickly and capitalise on opportunities that come up.”

Striking a chord The company also seems to have hit a chord with employees. Todd says: “We just did some staff feedback and two things they liked about working for K10 was the team they worked with and the quality of the food, which differed from why they joined K10, because the unanimous reason they gave then was because it was only open Monday to Friday! Now they are in the door, so to speak, they like the team and the food. Again, it shows we need to talk more about our food, and that we have something here people can get behind and be proud to be part of.” The company has looked at other areas of growth. It currently operates a virtual brand, Katsunama, out of its Appold Street site. On the first floor of the same site, it operates Beer & Buns, its izakaya bar concept, which may have legs for further expansion in the future. However, at the moment the majority of energy is behind its core takeaway format. Todd says: “K10 provides the customer with great choice, very high-quality, fresh prepared food and very fast service. We focus on these strengths to ensure we have happy customers that come back to us again and again. There is a sensible, controlled growth plan in place and my task is to build on the progress we have made already.” ■


Booking a table online is now the favoured way of making a reservation, according to the latest GO Technology report from Zonal. Research by Zonal and CGA of 5,000 UK adult consumers shows that 45% of consumers prefer to make their booking online, compared to just 20% who use the telephone.


of consumers prefer to make their booking online

This is a radical change from four years ago, when well over half (58%) of consumers preferred to make table bookings by telephone.

=RQDO¡V FRPPHUFLDO GLUHFWRU 'DYLG &KDUOWRQ VDLG “We live in a digital age, where consumers expect to make reservations on the go 24/7 from their mobile device and they are not keen on phoning a venue to do so.â€?

For almost half (49%) of those planning to go out for a drink or bite to eat, the ability to pre-book is important. And payback for brands that offer a good online booking service is proven, as the average monthly spend on eating and drinking increases to Â… FRPSDUHG WR MXVW Â… IRU WKRVH WKDW GRQ¡W SUH ERRN


of those planning to go out for a drink or bite to eat, the ability to pre-book is important

However, brands do need to make sure they fulfil the expectations of those that have pre-booked. The biggest complaint for pre-bookers is a table not being available at the time they booked (37%), closely followed by having to queue to get in (35%) and spaces or tables being occupied when they arrive (34%).


The biggest complaint for pre-bookers is a table not being available at the time they booked

Being asked to pay a deposit for a booking is also a source of irritation for customers, with one in five (21%) citing this as a major annoyance, which rises to 25% for 18 to 34 year olds.

one in five

cite being asked to pay a deposit for a booking as a major source of irritation

When it comes to group bookings, GO Technology suggests they are more prepared to pay a deposit. Consumers in a group of fewer than eight say they are willing to pay an average of ÂŁ4.55 per head for a midweek restaurant table, but those in larger groups will pay ÂŁ6.04, indicating an acceptance that as the group size increases so should the deposit.

“We recognise there is an industry wide issue of no-shows, so requesting a deposit is one way of tackling the problem. However, ask for too much and consumers may go elsewhere and ask for too little and the risk of no-shows increases,� DGGHG 'DYLG

When asked what they would like to see when booking, the number one consumer choice is the ability to reserve a specific table, booth or area (42%). Getting their favourite space or a table with a view is more likely to leave guests satisfied with their visit, and more likely to return. When asked what they would like to see when booking,

the number one

consumer choice is the ability to reserve a specific table, booth or area

Advertising Feature


PAUL is a family-owned chain of patisseries passed down through five generations. The biggest bakery in France, PAUL uses traditional French methods to produce the freshest bread and best-tasting patisserie in 45 countries across the world.

The majority of PAUL team members want 8-hour shifts, 5 days a week. Cowles was conscious that cutting hours from his core team wouldn’t work for many of PAUL’s existing staff members and, due to recruitment costs, was hesitant to hire a whole new part-timer to fill shorter shifts.

PAUL Operations Director, Gary Cowles, implemented Catapult’s flexible workforce to address daily peaks while maintaining their own staff’s desired working hours. They discovered that not only did they capture additional sales but they also reduced churn within their core team.

On top of this, PAUL’s large range of freshly prepared products provided an added layer of complexity as it takes new team members several days to learn the entire menu and ingredients.

.QQMKPI CV VJG DKIIGT RKEVWTG Using their deployment software, Cowles identified stores that were understaffed during peak times and therefore missing out on potential sales. He found that Canary Wharf had a 3-hour window every day, Monday to Friday, that would benefit from additional support.



(KPFKPI UQNWVKQPU Careful to protect the PAUL customer experience, Cowles, along with Catapult’s dedicated team of account managers, decided to focus on covering barista shifts. This approach allowed PAUL to buy in a skillset that’s standard across the industry while also releasing a member of PAUL’s team to take on a customer service role.

Advertising Feature

Catapult, which handles all the administration and costs associated with attracting, vetting and performing right to work checks for candidates, set about recruiting and upskilling candidates to meet PAUL’s specifications. The Catapult team was able to build a pool of brand-trained flexible staff with the skills and experience required to work at PAUL bakeries across London.

Seeing results After implementing Catapult, Canary Wharf was able to capture additional footfall leading to an 8% uplift in sales, while other stores reported improvements in staff turnover. One PAUL store had a relatively new team. Catapult baristas were deployed for longer shifts over a 4-week period, allowing the store manager to concentrate on team member training and upskilling, resulting in fewer churned staff. Finally, PAUL introduced a production role specifically for

Catapult staff, who are brought in to help prepare fresh sandwiches and salads during seasonal peaks.

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Summer Conference

International insights Martin Cooper picks out some highlights from the Propel Summer Conference

Ted Kennedy, director of Duck and Rice restaurant in Soho and chairman of Pebble Hotels Ted Kennedy, director of Alan Yau’s Duck and Rice restaurant in Soho, said the concept would look to open “two or three” more sites in London before eyeing roll-out across Asia. He said: “The original idea was to make it a success in London then roll it out across Asia. I suspect the next stage for Duck and Rice is to do two or three more sites in London – there are a lot more sites currently on the market. Then I think someone should take it on from us and run with it – but it would be throwing off money by that stage.” From the floor, Propel managing director Paul Charity asked how Duck and Rice, which offers “fantastic value for such high-quality food”, was recovering after posting £16,000 a week in losses despite £80,000 a week in sales? Kennedy, who is also chairman of Pebble Hotels, said: “We haven’t de-skilled anything, we’ve invested a little bit in new equipment to make if more efficient. We have put in an extra 15 covers by rejigging the site and looked at menu margins. Even at £30 a head we get 78% food margin.

We made sure we didn’t lose the magic dust the customer sees but tried to drive more efficiency. Getting rid of central costs made a huge difference. We outsourced all the accounting and the costs we hammered were costs that sat outside the restaurant.” One problem Kennedy had to face before Duck and Rice launched was the beer offering. The restaurant took over a former run-

“I suspect the next stage for Duck and Rice is to do two or three more sites in London – there are a lot more sites currently on the market”

down pub in central Soho that had lost its licence. However, the initial fit-out saw the cellar turned into a kitchen, leaving nowhere to store beer – a problem solved by turning to tank beer. Kennedy said: “Tank beer now makes up 70% of our drinks sales. It might have changed but at one point we were the second-biggest seller of Pilsner Urquell tank beer in Britain!” ▲ AUTUMN 2019 PROPEL QUARTERLY


Summer Conference Dominic Allport, insights director at The NPD Group The NPD Group insights director Dominic Allport said to thrive in the current “anaemic” low-growth eating out market, operators should focus on “value and convenience while targeting health and quality”. He revealed total out of home (OOH) visits in the UK had grown a mere 0.01% year-on-year but NPD Group data showed a rise in consumer needs for value (5.3%), convenience (5.6%), and health and quality (7.4%). Allport told delegates operators should remain prudent on pricing while looking for other ways to offer value. He said: “People think restaurant prices are too high, while they haven’t got enough money in their pocket. Those who visit ‘on deal’ are promiscuous and

“On average, vegetarians spend more than pure meat-eaters and flexitarians on a night out as they’re prepared to spend more on quality or something different”

go where the best deal is. This sector is increasing at a much higher rate than the rest of the market.” He said the “basic drivers of value were evolving”, adding: “Pricing or a deal remain central but surrounding factors influence people’s perception of value. Traditionally those were cleanliness, convenience and quality but are increasingly moving towards experience, healthier options, and quality and taste prompting a 9.0% year-on-year rise in footfall compared with traditional attitudes (1.8%).” Regarding convenience, Allport said operators should be as “multichannel as possible”, highlighting drive-thrus and technology. He

said: “Drive-thru was all about quick service restaurant burger chains but now you’re increasingly seeing Costa and Starbucks – drive-thrus are the new frontier, visits grew 11% in the past 12 months.” Allport said operators should also widen menu choices to include non-meat options, catering to the “ten million people in the UK looking to cut down their meat consumption”. He said flexitarian visits were growing strongly and forecast they would reach 16% share of total OOH visits by 2021. He said: “On average, vegetarians spend more than pure meat-eaters and flexitarians on a night out as they’re prepared to spend more on quality or something different.”

Antony Hunt, managing consultant in innovation at CACI Customers are craving “experiences over possessions”, according to Antony Hunt, managing consultant in innovation at marketing, technology and data specialist CACI. He told delegates: “The proportion of household spend that goes on non-retail has declined over the past five years. With spend on ‘stuff’ remaining flat, that extra spend is being pumped into services including catering, leisure and nondiscretionary experiences. The amount we spend on living is declining and the money it releases is being spent on enjoyment. “On top of this, frequency of visits to shopping centres has declined, down 10% since 2014 but, crucially, net promoter score in our Shopper


Dimensions survey has soared 30% during the same period. That means people aren’t visiting centres less because they don’t like them or they’re dissatisfied, it’s because they’re changing their behaviour. This adds further evidence to the fact we’re going through a structural shift.” Hunt added there was a generational correlation with the significant decline in footfall at shopping centres and leisure complexes, with those under 34 and over 65 making up a greater proportion of shoppers compared with a decline in family-aged groups. Hunt put this down to “time pressure”. He said: “The younger and older groups have time and money and seek similar things, albeit for different reasons.

“People aren’t visiting centres less because they don’t like them or they’re dissatisfied, it’s because they’re changing their behaviour”

For them, experience, leisure, personalisation and new discoveries are all key. The older generations as they have everything and don’t need material possessions, the youngest because they’ve partly rejected mass consumerism in favour of experience.”


Regarding the viewpoint that 75% of shopping centres offer the same brand profile. Hunt said: “The challenge for operators is to create places where people can come together and where they can connect with your brand. Success is inherently driven by your restaurants’ locations. This dictates all of the dynamics associated with demand.” Referring to recent highprofile high-street casualties, Hunt said: “In each instance there was a clear disconnect between each brand and what it was delivering to its customers. They didn’t monitor the changes that were happening in consumer preferences and the market place to make the necessary decisions to stay ahead.” ▲

Summer Conference Michael Ingemann, Think Hospitality partner and chairman Think Hospitality partner and chairman Michael Ingemann helped to set up Copenhagen-based, two Michelin-starred restaurant Noma. Asked about his thinking behind the concept, he told delegates: “The idea in the beginning wasn’t commercial, it was to use Noma as a laboratory and show you could run a restaurant using only ingredients from Scandinavia. In the beginning we were a laughing stock but when we got in a star chef, Rene Redzepi, he set the scene. Commercially, however, I don’t think it’s something that can grow.”

Asked what UK concepts he thought could work in Scandinavia, Ingemann replied: “A lot of the Asian-themed concepts and healthy brands such as Abokado, for one, could do well because we don’t have many of those. Also Flat Iron could go straight in and corner the market. There are a lot of UK brands with strong stories and sharp concepts. “I think what you have in the UK in general – and it’s something you don’t realise “If you come in from the UK with a sharp concept and the capacity and capability as an operator, you have a really good chance in Scandinavia”

you have – is a lot of expertise as operators. There are a lot of good chefs in Scandinavia but not a lot of them are good operators. If you come in from the UK with a sharp concept and the capacity and capability as an operator, you have a really good chance in Scandinavia.” Regarding investment outside the UK, he said: “If you’re an investor, there is opportunity out there. New York is a tough game but Scandinavian countries have developed into quite sophisticated culinary markets and there aren’t many international concepts there yet.”

James Hacon, founder of Think Hospitality Think Hospitality founder James Hacon revealed the “ten key trends that unite us all”. He told delegates: “The first is a movement towards diversity and inclusion by consumers, who expect businesses to respond to this and be at the cutting edge of issues. The second is about responsible consumerism. That’s not all about plastic or the environment, it’s also about how you source your food and treat employees. “Thirdly, we’ve seen ‘experiences over things’ become a big part of the way people spend money. They are reducing spend and ensuring they get the best value. When it comes to experiential leisure, there’s a link between the time people spend on an experience and the amount of money they spend.” Moving on to changing eating habits, he said: “The plant-based


“With all the talk of millennials, the biggest increase in spending opportunities is in the older demographic, yet few businesses put it at the centre of their strategy”

diet movement isn’t because we’re all turning vegan. What we’re seeing is people being more aware of what they eat.” Regarding social media, he said: “More and more people choose where they go if it fits their personal brand image rather than for the experience itself.” Sticking with technology, Hacon said: “We’ll see more app-based ordering but technology will become a greater player in the convenience space and more important back of house.” He highlighted the “biggest risk” to the hospitality sector as “Netflix and chill”. He said: “People want to feel safe at home and we’re seeing it through the rise of delivery. What’s key for our sector is working out how we’re going to respond. Is it about pubs taking on the role of an off-licence or restaurants doing grocery items?”


Regarding his ninth trend, urbanisation, he said: “People are continuing to move into cities, which will make the convenience factor even more important as city spaces become smaller. At a conference in Milan I was told it’s a key trend there for people not to have a kitchen, particularly student accommodation, with people ordering in.” Hacon’s final trend involves ageing population. He said: “With all the talk of millennials, the biggest increase in spending opportunities is in the older demographic, yet few businesses put it at the centre of their strategy.” Rounding up, he said the “one consistent challenge” he found throughout his travels was a “lack of access to great people”. He said: “This isn’t just a Brexit thing, this is an international problem.” ▲

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Summer Conference The Glee Club founder Mark Tughan Mark Tughan, founder of the UK’s largest comedy club brand The Glee Club, which is in its 25th anniversary year, talked about the cost of hiring comedians. Comics are generally available to book in priced tiers, which can range from less than £2,000 for less well-known names up to big-hitters such as Michael McIntyre and Jonathan Ross, who can charge £30,000 linked to their fame and popularity. Propel managing director Paul Charity asked how the supply side was at the more affordable end? Tughan said: “There isn’t really a problem in terms of supply. There’s a twotier market. When it comes to

“We’ve been going so long we’re one of the biggest talent bookers so the club can almost book itself”

the club comics and weekend comics, the business model is such that it’s a set fee. “For music and touring shows, the business model is a door split – 70% in their favour. For the comics on Thursday, Friday and Saturday nights it’s a set fee per performance and we often do two shows on a Saturday night, one in the big room and one in the little room, which is a slightly lesser fee. “I don’t find any problems sourcing new talent. We’ve been going so long we’re one of the biggest talent bookers so the club can almost book itself.” Asked from the floor how he markets to the kind of eclectic audience his venues

in Birmingham, Cardiff, Nottingham, Oxford and Glasgow attract, Tughan said: “We’re a bit old-fashioned – we’ll even occasionally do direct mail! Our marketing budget was about £80,000 to £90,000 this year, including launching in Glasgow in February, and about half of that is digital. I started the business in 1994 and in our head office we had one computer and a fax machine. Now it’s meltdown if there isn’t public Wi-Fi in our venues and heaven help us if it goes down in our head office. Everything is becoming more data-driven so the budget will be more like £100,000 next year.”

Mario C Bauer, AmRest brand ambassador, Curtice Brothers co-founder and WhiteSpace partner Mario C Bauer, AmRest brand ambassador, Curtice Brothers co-founder and WhiteSpace partner, talked about franchising internationally. When asked what he thought about high rents in the UK, he said: “When I talk to people in the US who have brands that want to expand into Europe, their first stop is always London. The high rents and rates are obviously a negative aspect but, nevertheless, London remains attractive because of the international attention and purchasing power. There’s no perfect country to franchise into, they all come with strengths and weaknesses. The most important thing is to find a way to navigate through.” Propel managing director Paul Charity asked whether it was the same in mainland Europe as it is in the UK, where agreeing a large rent


can set the precedent for the rest of the street? Bauer replied: “No. It is much more balanced. There’s less competition for space and landlords need to find operators, cutting out the bidding process and leading to a fair rent – except Paris, which has similar competition for space but they don’t have the rates.” Asked what his rule of thumb was regarding franchise profit share in Europe, Bauer said the Domino’s method of two-thirds profit for franchisees and one-third for the company worked – but only if you made 18% to 22% Ebitda. He said: “All franchise companies need to take out a minimum of 5%. I always recommend you take 6% if you have a great brand. If you take 6%, you need to make 18% Ebitda so that plays out with the two-thirds/one-


“All franchise companies need to take out a minimum of 5%. I always recommend you take 6% if you have a great brand”

third split. Once you drop towards 10% Ebitda or single digits and you take 6% out, you definitely don’t have a return on your investment. “A proven concept is not a proven business model. You may have people queuing out the door but great sales don’t mean great Ebitda. Then there’s entering a new country and how long it takes to adjust the concept. That’s why I say franchising is not ‘for the moment’, it is an investment.” Regarding the collapse of the Jamie’s Italian business in the UK but its continued growth under franchise internationally, Bauer said: “Maybe the concept is perfect for doing £1.2m to £1.5m sales. Internationally, for those sales you can be profitable, especially in countries with special labour and rent situations, whereas that’s not enough in the UK.” ▲

Bibendum is proud to sponsor the Propel Multi-Club conference “We are delighted to be sponsoring the Propel Multi-Club conferences throughout 2019 and look forward to participating in these fantastic events.” Michael Saunders, CEO As a nationwide specialist distributor to the On Trade, Bibendum delivers to a wide range of customers from top restaurants and cocktail bars, to catering companies, pub groups and hotels. With a list of over 350 wine producers from across the globe, our portfolio boasts a wide range of award-winning wines across all price points. Alongside this, we also have a large, exciting range of spirits, from artisanal gins to premium tequila. Our training team travel around the country to help staff become well-versed in the different products they sell, while we have an in-house customer marketing and design team who help take a drinks list to the next level. Our dedicated market insights team use cutting-edge technology to stay ahead of the game, ensuring the right product gets to the right customer.

If you would like to find out more about how we can help your business, please don’t hesitate to contact us. We’d love to hear from you. | 07976 709958 | Michael Saunders

Summer Conference Graffiti Spirits founder Matt Farrell Matt Farrell, founder of Graffiti Spirits and investor on My Million Pound Menu, touched on some of the challenges he sees the industry facing during the next year. Graffiti Spirits operates bar and restaurant concepts such as El Bandito, 81 and Santa Chupitos in Liverpool, while the company opened threestorey, 500-capacity Duke Street Food and Drink Market, which houses six traders and three bars, in June. Farrell told delegates: “The political and economic climate has had a massive effect on Liverpool. It has the biggest openings of independents of any city outside London percentage-wise. However, that leads to saturation, which is a problem when people have a limited amount of disposable income in their pockets. You’re

“You’ve got to come up with techniques and strategies without cheapening your brand while thinking about how it comes across on social media”

constantly having to battle your rivals to come up with new ideas, push things forward and constantly change things. It’s time-consuming and difficult at the moment to get people out of their homes when the likes of UberEats can deliver it to your door. You’ve got to come up with techniques and strategies without cheapening your brand while thinking about how it comes across on social media.” Graffiti Spirits’ constant evolution will see the company convert its Slim’s Pork Chop Express site in Liverpool’s Seel Street into a gourmet chicken takeaway and speakeasy-style arcade. The new concept, 16 Bit Chicken, will operate as a takeaway restaurant serving fried chicken pieces and burgers but with an arcade at the

rear featuring 16 retro games such as Pac-Man, Point Blank, Time Crisis and Golden Axe. Once all its concepts are up and running, Farrell expects the company to collectively turn over £7.5m a year, with staff levels rising to 200. The company has also brought a lot of work in-house by forming a self-reliant team. Farrell said: “We brought in Brian Humphrey, former senior operations head chef at Living Ventures, as executive chef. He has been a breath of fresh air. We now have an operations manager and finance trainers to go in each site and we’ve really focused on our PR and media, running it in-house and we’re finding it much more relatable when you’ve got someone who the staff can run ideas by.”

Remarkable Pubs managing director Elton Mouna Hospitality leaders shouldn’t be afraid to promote their business, Remarkable Pubs managing director Elton Mouna told delegates. Outlining the seven P’s on which he has based his career – place, product, price, promotion, people, process and physical evidence – he said: “From a cultural point of view, promoting your business makes people proud of the company they work for and it makes it easier regarding recruitment when people have heard of us. It also helps with off-market acquisitions. We recently bought a pub because they came to us knowing what we’re all about – it also generates opportunities to collaborate.” Regarding “place”, Mouna


admitted Remarkable tended to buy pubs in “less salubrious parts of London”. He told delegates: “Once we do them up, however, we have some stunning pubs and in some ways a good pub going into an area can be a catalyst for change.” Moving on to “people”, Mouna said his principles were: “Work hard and be nice to people.” He added: “You should take work seriously but not take yourself too seriously. If we don’t take heed, we’re in danger of turning into hospitality dinosaurs. Take a genuine interest in your people, learn what they are into outside of work. Create a happy and positive culture with spirit.” Mouna also has an

“If someone comes for a job they interview me, not the other way round. That way they can see if a job with Remarkable Pubs would suit them”

interesting take on interviewing techniques. He told delegates: “If someone comes for a job they interview me, not the other way round.


That way they can see if a job with Remarkable Pubs would suit them. There are plenty of other pubs they can work for, so I sell myself to them.” Regarding “product”, Mouna said he managed to “keep things fresh” at Remarkable by finding the right balance between beer brands owned by the brewing giants and “cutting edge” brands from local producers. Mouna said Remarkable took a “forensic approach to pricing”, adding: “We operate a yearly price review with each general manager – one to one, line by line and product by product – and that puts us in a position where we charge the most our customers are prepared to pay – no more, no less.”


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Outlook~ blustery Paul Chase confronts some of the headwinds operators face during an uncertain period for British industry


t this year’s Propel Summer Conference I gave a presentation on minimum unit pricing (MUP) to a receptive audience. What surprised me was how few people in the audience knew what MUP was or the politics of the issues surrounding its introduction. I don’t propose to rehearse all that here but it was a timely reminder for me that the preoccupations of activists are not always shared by those on whose behalf we seek to act! I got an even warmer response to my comments at the end of the presentation on the headwinds that lie ahead for the licensed retail and broader hospitality sectors. I mentioned Brexit uncertainties and their impact on recruitment, consumer confidence and spend; the perennial issue of business rates and last, but not least, the looming impact of the 700% increase in fees from copyright organisations PRS and PPL for “specially featured entertainment”. With all that going on perhaps I shouldn’t be surprised the health lobby and nanny state issues I’ve written and spoken about for many years get lost in the noise. One of the few benefits of the seemingly endless Brexit crisis is it has prevented the government’s production of a new alcohol strategy. This is good news as I have little faith in government’s ability to produce anything that doesn’t make matters worse. Politicians from all three main parties seem willing to kowtow to the fun police and blame alcohol, sugary drinks and obesity for increasing demands on the NHS when those demands are manifestly a product of our ageing population.

Milch-cow However, let me return to the issue of copyright companies. I operated licensed premises on Merseyside for 23 years. I cofounded CPL Training, which further widened my knowledge of people working in our sector and my relationship with them. I know how hard it is to make a living in our sector and detest the way it is misrepresented and used as a milch-cow by the health lobby and other interest groups that want a slice of a big cake – regardless of the fact they play no part in baking it. Taxes and VAT on alcohol rake in £10.5bn a year and, if you add taxes on smoking, gambling and the sugar levy, that figure rises to an astronomical £24bn a year. Business rates, meanwhile, bring in an annual £24bn for the government. This is the context in which PRS and PPL are attempting their land grab. With a millennial generation unwilling to pay for



recorded music but downloading it from a variety of sources, legal or otherwise, threatened increase in PRS and PPL are foraging for new fees from copyright sources of income. organisations PRS and PPL These organisations have set themselves up as quasi-regulators and operate a monopoly – able to demand payment with legal menaces for public playing of music so they can reward hugely rich record companies, music publishers and performers. This is a classic example of what economists call “rent seeking” – extracting an economic reward that wouldn’t be delivered by market forces alone – by exploiting a regulation that gives them enormous power. After complex and lengthy negotiations failed to deliver a compromise, UKHospitality is rightly challenging the new charges at the Court of Arbitration. This will be an expensive exercise and may cost as much as £200,000 but however necessary this step is, the case won’t be won by lawyers alone. There will need to be a political dimension to this as well and legislation to curb the power of the copyright organisations to screw even more money out of the sector is long overdue. Meanwhile, the health lobby wants a return to inflation-plus annual rises to alcohol duty and an extension of the sugar levy to milkshakes – notwithstanding the fact there isn’t a shred of evidence the levy has reduced obesity. Perhaps the only benefit of a Boris Johnson premiership is he’s signalling his willingness to cut sin taxes, even if he doesn’t really understand why. In the event of a no-deal Brexit the government will certainly need to do something to cut the cost of living for the poor and all those living in “left-behind” communities. I’ve never known a time of such uncertainty and the prospect of us crashing the economy to validate a right-wing economic experiment is getting closer by the day. The headwinds are becoming blustery indeed!

Paul Chase is director of Chase Consultancy and a leading industry commentator on ▲ alcohol and health




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Dinner has landed Dominic Allport, insight director foodservice UK at NPD Group, highlights six themes that will shape Britain’s £56bn out-of-home foodservice industry this year

“Any innovation that cuts costs, expands reach and increases automation will be welcomed by the foodservice industry – and drones fit neatly under all three headings�

channel in Britain within five years, providing legislation allows. Any innovation that cuts costs, expands reach and increases automation will be welcomed by the foodservice industry – and drones fit neatly under all three headings. Consumers will love the novelty of telling family and friends “dinner has landed�. Companies will relish the opportunity to create branded drones that offer a new marketing opportunity and increase customer loyalty. Drones are also likely to be more sustainable than some other forms of transport and could work just as well in rural locations as cities. Therefore, my vote on the likelihood of dinner landing on somebody’s front porch in Britain within, say, five years is a firm “yes�. There are regulation issues, of

course, but I think drone delivery could easily happen, at least to a limited extent. Delivery is redefining the future of British foodservice. Delivery of food orders is by far the industry’s fastestgrowing channel and its extensive use of technology means it is also the most innovative. There were 792 million delivery visits in the year ending (YE) May 2019, an increase of 217 million or 37.7% since YE May 2016. In contrast, total visit figures for the British out-of-home (OOH) or eat-out foodservice industry grew only 0.4% between YE May 2016 and YE May 2019. Delivery increased its share of Britain’s foodservice industry from 5% of visits in 2016 to 7% in 2019. This could soon reach 9% based on NPD’s prediction of a 28% increase in foodservice delivery ▲ All charts: Source: NPD CREST / NPD Foodservice Outlook


lbert Einstein is reputed to have said: “I never think of the future; it comes soon enough.� Einstein may not have troubled himself with contemplating what the future might bring but others have kept themselves busy picturing tomorrow’s worlds for centuries. Think of Leonardo da Vinci, who sketched an early design for a helicopter in the 15th century. HG Wells wrote about time machines and invading Martians in the 1890s. In 1901, a cartoon from satirical magazine Punch depicted police officers using personal flying machines. In 1927, Fritz Lang released his futuristic vision Metropolis, a film adapted by rock band Queen for Radio Ga Ga. Today’s glimpses of tomorrow include autonomous driving, personalised medicine, space elevators, nuclear fusion, nanotechnology, 3-D printed homes, high-rise urban farms and many others. But how about the future of our industry? In the fast-changing world of British foodservice, my favourite prediction is drones will be a feature of the delivery

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2016. Delivery of breakfast is up 82% and lunch 106% since May 2016. Snacking delivery visits are also growing rapidly, up 68 million since YE May 2016, indicating the increasing appeal of delivery across the day. About 70% of delivery visits are to residential addresses, while 10% are to work locations. However, it’s not only young consumers who like food and beverages arriving at their door – delivery visits grew strongly among over35s between YE May 2016 and YE May 2019, with visits up 52% or 73 million.


amount UK delivery spend increased in the year to May 2019 versus three years ago

Pubs have appetite for delivery too

Lunch and breakfast to your door With more than 60% of delivery visits occurring at dinner, the channel is strongly associated with evening meals – but this suggests delivery has ample room to grow at other times of day. Breakfast and lunch combined accounted for 21% of delivery visits in the year to May 2019, an increase of 53 million and a 97% rise since May

Although British pubs accounted for less than 5% of the delivery market in 2019, they have increased delivery visits by 97% since YE May 2016. Branded pub chains in particular are expected to offer more food for delivery in the coming years as this is an effective way to keep kitchens and kitchen staff busy during quieter trading times. Foodservice delivery spend has almost doubled in the past decade and is especially profitable for restaurants

looking to increase business volume. In the short-term, commission charged by aggregator platforms could have an impact on operator profitability but the long-term trend for food delivery is growth. The arrival of virtual restaurants, usually run from dark kitchens and offering delivery-only brands, will strengthen the wider movement away from retail-based foodservice.

App orders are growing

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Delivery orders made by phone are declining in favour of apps. Phones accounted for more than half (56%) of all delivery “visits� in 2016 but this shrank to 43% by 2019. App orders are racing ahead and are up 256% since 2016 and accounted for more than one-fifth (22%) of total delivery visits in 2019. Within the 16 to 24 age group, app delivery visits now account for more than one-third (35%) of total delivery, highlighting the increasing importance of technology in younger peoples’ lives. However, operators will only see further growth if they get the formula right in terms of quality, price, freshness and speed to customer while also meeting public concerns over excessive packaging associated with delivered food.

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Better packaging and on-time delivery is especially important for hot food that isn’t easily reheated such as burgers, chicken, chips or fries. Burgers are included in 6% of delivery visits in 2019, chips or fries in 15% and chicken in 24%.

Virtual restaurants The delivery boom has created a new type of foodservice operation known as a virtual restaurant, ghost restaurant or cloud restaurant. These are usually run from dark kitchens owned by aggregators such as Deliveroo, Just Eat and UberEats and offer delivery-only brands. They can trade from unconventional sites such as an industrial estate rather than a traditional retail location or can be run from an under-used restaurant. A core appeal is virtual restaurants can begin trading quickly, are relatively cheap to run and are flexible, aided by a lack of overheads such as dedicated retail premises and waiting staff. NPD estimates there are more than 1,000 virtual restaurants in the



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UK, with the number increasing rapidly. Virtual restaurants still bring with them the challenge of growing virtual brands into meaningful propositions in the eyes of consumers but, on the upside, the wealth of customer data available to delivery aggregators will provide opportunities to marry virtual restaurants with local preferences.

“Aggregators will reap greater rewards through subscription and loyalty programmes. It’s also likely foodservice brands will partner with in-home entertainment providers to capture that ‘cocoon’ market segment�

Virtual restaurants The dark kitchen model works best as an alternative to high-rent areas. They can service customers in prime locations from a place offering lower costs. All they need to do is ensure their delivery operation can reach customers quickly and conveniently. A virtual restaurant makes for a highly flexible business model compared with a traditional restaurant. Changing a menu is easy as all the content describing your food is online. It’s easier to make seasonal changes to take advantage of particular types of produce in spring, summer and autumn. Set-up costs are also cheaper as there’s no requirement for interior decor, signage or plates and utensils. Staff costs are lower too. Virtual restaurants make it easier to experiment. If you have a new idea you can try it out and see how well it works.

Future food There’s much more innovation to come from the delivery channel and its future looks good. Driven by technology, the rise in in-home entertainment subscription services such as Netflix and Amazon Prime and a desire to save money, consumers are likely to “cocoon� and eat more meals at home. Delivery already plays to consumer needs for convenience and enjoying a “treat�. In the future, consumers wanting to order and eat at home will have more complex requirements, ordering from OOH operators as well as grocery outlets. Aggregators such as Deliveroo, Just Eat and UberEats will reap greater rewards through subscription and loyalty programmes. It’s also likely foodservice brands will partner with in-home entertainment providers to capture that “cocoon� market segment. As I said, consumers will love the novelty value of receiving their food order via drones. As soon as British foodservice operators get a viable and authorised drone delivery platform, they’ll offer it to the public for appropriate food in selected markets. The key to all this will always be convenience – that’s what people are always looking for and that’s ultimately where the future lies in British foodservice. Our industry has an exciting – and above all appetising – future.

Dominic Allport is insight director foodservice UK at The NPD Group ƒ AUTUMN 2019 ƒ PROPEL QUARTERLY




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Coffee Conference

Jumping conference beans Martin Cooper reports from the inaugural Propel Coffee Conference as the sector continues to expand exponentially

James Horler, chairman of Notes Coffee Roasters & Bars Chairman James Horler described Notes Coffee Roasters & Bars as a “chameleon offer”. Talking to Propel managing director Paul Charity, he said Notes, which operates ten London sites, also operates a wholesale business, a subscription service and has widened the offer at its coffee shops. He said: “Seven of the sites trade through coffee, brunch, lunch and into the evening. Now we’ve moved into private events, which we see as further opportunity to grow the business into the evening. “Anyone who operates coffee shops knows it’s a challenge. The relationship between fixed costs and profitability is becoming ever more difficult. The labour issue and cost makes it even more difficult so we’re constantly looking at ways to improve revenue. “We launched brunch into a number of sites 12 months ago and that’s grown revenue. In the evenings we offer rustic sharing

dishes with quality ingredients, which links with our premium wine offering. That we can trade from early morning until 10pm helps with the operational gearing model of the business. “I see the wholesale side as a significant contributor to profits and a big focus for us in a world where we don’t know what’s going to happen to rents, rateable values and payroll costs. If we get to a £10 minimum or living wage, that would put huge pressure on costs. On the subscriptions side, we’ve designed a Nespresso-compatible capsule that’s completely biodegradable.” Horler said the company had been seeing more than 9% like-for-like sales growth for the past 12 months. He said: “The brunch sales have been strong and the events side successful by hiring out space in the evening. We may open one or two coffee shops – but we’ll focus more on wholesale.”

“I see the wholesale side as a significant contributor to profits and a big focus for us in a world where we don’t know what’s going to happen to rents, rateable values and payroll costs”

Taylor St Baristas founder Nick Tolley Taylor St Baristas founder Nick Tolley told delegates consumers are prepared to walk past coffee shops that are closer to where they live, work or shop to find the quality coffee they want. He said: “For many years it was about convenience but now there is a significant trend towards quality. It’s the second-most important driver of customers to coffee shops. For those who prefer quality coffee and drink it every day, it’s the number-one reason for their choice of coffee shop. “For that reason, businesses are looking to speciality coffee to flesh out their offer. Sports stadia, office spaces, universities, even car washes

and furniture shops are turning to quality coffee as a way to elevate their business and brands. Today, people can tell the difference between a good cappuccino and a bad one, and a bad one isn’t good for business.” Tolley founded Taylor St Baristas with siblings Andrew and Laura in 2006. The company has opened more than 60 cafes through partnerships and signed a global partnership with Sodexo, aiming to launch more than 100 branded Taylor St cafes in the next

“Even car washes and furniture shops are turning to quality coffee as a way to elevate their business and brands”

five years as part of the deal. Tolley said by drawing on all that experience he had devised the four requirements to scale speciality coffee – people, quality coffee, operating know-how and innovation – and people were the most important factor when operators set out to grow their business. He said: “It’s not hard to get goodquality coffee with the right beans and kit but people can mess it up because they’re not robots. You’ve got to recruit them, train them and retain them and you’ve got to do that consistently over time and across geographies. You need to start with a people plan.” ▲ AUTUMN 2019 PROPEL QUARTERLY


Coffee Conference

Coaching Inn Group chief executive Kevin Charity Kevin Charity, chief executive of coaching inn operator The Coaching Inn Group, explained the company had launched a debut standalone coffee shop in a bid to grow a “fourth income stream”. Last year the company purchased The Feathers in Ledbury, Herefordshire, which had a room that only hosted the odd meeting. That space has now been relaunched as Coaching Inn Group’s first dedicated coffee shop, with the site producing a 300% increase in coffee sales for the first full seven days of trading. Charity told delegates: “We wanted to create a fourth income stream to go alongside the wet, food and accommodation, something more than just an addon. We’re aiming for £10,000 a week turnover on our standalone coffee shop concept and, regarding acquisitions, we’re looking for sites that can house a coffee shop. “The idea is to push a premium coffee offer. We’re at the higher end of proposition in our market towns, our drink and food offers are premium and that’s the way we want our coffee. We want to steal back the heart of the community and be the number-one choice on the high street.” Coaching Inn Group has grown

to 15 sites in market town squares across 13 counties. Charity said: “We have the perfect venues and the best square footage in every market square, plus our teams are already there preparing breakfast service so to sweat every daypart makes sense. We’re now as busy in the mornings as we are at lunchtime and we’ve created an afternoon tea trade on the back of it. “If people enjoy their coffee experience with us they can come back for the other experiences we offer. Afternoon tea, for example,

“We’re now as busy in the mornings as we are at lunchtime and we’ve created an afternoon tea trade on the back of it”

has gone massive since we launched the offer, far bigger than we thought possible. It’s getting people to come back and use us as a one-stop-shop, whether that’s coffee in the morning or after school, weddings, parties, christenings, we want to provide that community offering – and coffee will contribute massively.” Charity said the company’s twoyear review of its coffee offer had led to a 20% increase in coffee and patisserie sales across the estate, with sales “1,100% higher than the pub market average”.

Dominic Allport, foodservice insights director at The NPD Group dayparts. With competition Pubs are pushing strongly everywhere, an operator into the UK out-of-home needs to be increasingly (OOH) coffee market as where the consumer is. venues “increase their “Although train stations dayparts”, Dominic Allport, and service stations are foodservice insights director obviously popular for those at The NPD Group, told looking for a quick pick-medelegates. up, people are also buying He said although coffee coffee in department stores, sales in pubs only stood at 8% of OOH transactions, “Pubs were late for instance, which is more the sector was “on the rise”. into the game but of a catch-up moment and a He said: “Pubs are one of what they’ve done leisure occasion.” in the past couple the areas regarding coffee Allport said growth of years has been in the OOH market was that’s growing well. Pubs incredible in were late into the game but being driven by families terms of driving but traditional coffee shops what they’ve done in the past coffee visits” couple of years has been were being scored lower by incredible in terms of driving coffee visits. that demographic as they felt children were “often made to feel unwelcome”. “Although we’ve had a lot of pub Operators also need to incorporate closures in recent years, those that technology into their coffee offer. He remain are focusing in on coffee, said: “Click and collect is growing spreading their assets and increasing



10% faster than the rest of the market place. While it makes up only 1% of the market, it still represents about £150m of spend and is increasing extremely quickly. “Technology is important for disrupting consumers away from your competition but also keeping them loyal to you. To operate an efficient service you must stick to the collect time and create a distinct area for people to pick up. You must train staff and have sufficient numbers to deal with it.” Allport said while only 2% of coffee orders in the UK were digital, in China that figure was 11%, equivalent to £500m in sales. He said: “Technology also gives you an opportunity to upsell online. With a lot of customer journeys occurring online or in the digital space, there’s an opportunity to talk to customers before they pay their final bill and suggest additional things to buy.” ▲


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Coffee Conference

200 Degrees co-founder and chief executive Rob Darby Rob Darby, co-founder and chief executive of Nottingham-based coffee roaster and retailer 200 Degrees, outlined his plans to continue the brand’s regional growth into city centres. The company currently operates ten coffee shops, two in Nottingham and Birmingham, and one each in Cardiff, Leeds, Leicester, Lincoln, Liverpool and Sheffield, with plans to open ten venues in the next two years. He told delegates: “We are moving into a growth stage so I suspect we’ll be spending for a little while – we’ve got several shops in the pipeline and a lot of growth coming up. In three years we’d also like to double our staff numbers to 300 and maybe have reached in the region of 20 to 25 shops. During the same period we want to double our amount of wholesale customers to more than 500 and further boost the amount of cups of coffee we sell, which is currently

“I think there’s real opportunity for growth outside London. We recently opened in Lincoln and it’s our busiest store by some margin”

Boston Tea Party chief executive Sam Roberts Boston Tea Party (BTP) chief executive Sam Roberts told delegates the brand was due to have its “best year ever”, despite a 25% fall in takeaway coffee sales following its ban of single-use cups last summer. Roberts said: “On virtually any metric we’re due to have our best year ever, despite the cup ban. We had to take a leap of faith. We went into this with 50% loss of sales as the worst-case scenario. If our coffee sales had spiralled into losing 80% or 90% perhaps we would have had a rethink but we went into this committed. The wave of positivity from customers has been unbelievable.” Despite the hit in takeaway sales, Roberts revealed BTP’s most recent total like-for-like sales were up 9%, while his vision is to grow a “profitable cafe business without compromising” while having a “positive impact on the world”. The move has also had a huge effect on staff retention. Roberts said: “Staff have loved what we’ve done. The amount of ‘leavers’ is down 20% since we launched the campaign, saving us so much in


about 12 million.” Asked what he saw as the brand’s biggest challenges as 200 Degrees expanded not only its number of sites but its geography, Darby replied: “Ensuring the brand and the essence of who we are translates all the way down. Most of our middle managers have been promoted from within. We’ve spent a lot of time making sure they understand what 200 Degrees is about so they are bringing in the right behaviours.” Asked whether a slowing of growth in coffee shops in the UK could be attributed to London, leaving more opportunities in the regions, Darby said: “I think there’s real opportunity for growth outside London. We recently opened in Lincoln and it’s our busiest store by some margin, even though we’ve got sites in the heart of Birmingham and Leeds.”

recruitment, retraining and development. It has had a massive impact and our employer brand is stronger than ever. We get people saying they want to work for us because “I truly believe we’re the ‘cup businesses that guys’. ignore the impact of “Yes we their trading on the have lost environment are on money over borrowed time” this but that’s levelling off now. What’s the cost of doing nothing? That’s much more frightening. We can’t externalise this and think it’s someone else’s problem. I truly believe businesses that ignore the impact of their trading on the environment are on borrowed time.” On 1 June, BTP launched Making Things Better Day, which saw the brand pledge to remove all single-use plastic milk bottles. Roberts told delegates its pledge on 1 June 2020 would be to eradicate single-use plastic from its supply chain.


Roasting Plant UK chief executive Jamie Robertson Jamie Robertson, UK chief executive of US coffee shop concept Roasting Plant, explained how the company’s patented technology was “transforming the customer experience”. Roasting Plant uses the Javabot system in all its stores, with beans placed into silos between 24 and 48 hours after roasting and to the exact specification required by the roast master. Customers can choose from eight speciality beans or blend their own. Robertson told delegates: “An amazing by-product of the system and the economic model is the in-store theatre, which I don’t think was front of mind when Mike Caswell invented the system but it’s a great accident. When you walk in, you see the beans flying around and the roaster roasting. It’s a bit like the cat watching the washing machine go round and it’s great for kids.

“We’ve had a great reaction from customers and feel the time is right for roll-out in a company-owned environment across London” “Then you’ve got that lovely in-house aroma and, for investors, you’ve got a sustainable model, leading Ebitda returns at store level and in the US we’ve proved it on a geographical level with stores in different cities.” Roasting Plant launched its first UK site near London’s Borough Market in January. Robertson said: “We’ve had a great reaction from customers and feel the time is right for roll-out in a company-owned environment across London. We’ll focus on London initially and getting it right for customers there – we’ve had a lot of interest from landlords already. We hope to have three sites by the end of the year if we can find the right locations.” Asked what he might do differently when launching stores, he said: “Getting the signage right. Initially, no-one in Borough could find us!”

Coffee Conference

Paddy & Scott’s founder Russell Scott

Panel discussion

Russell Scott, founder “Our processing of Paddy & Scott’s, plant is now available revealed how ethical to seven other farms trade and sustainability so we’re fuelling the has played a key role in ambition of people in the brand’s expansion. the area through the In 2016, the company work we’re doing. We’ve took on its own coffee got a ten-year lease on farm in Meru, Kenya, the farm and I have to working with the give that back after ten Muchomba family to years in a better position create a project to than when we took over. revolutionise how coffee Things such as water is traded and give more retention and reuse and back to the growers. reduction of copper Scott told delegates: sulphate are all things I “The Muchomba family “Our processing plant is want to give back at the no longer sell coffee to end of the term.” now available to seven the co-operative, which Customers can other farms so we’re could have caused a fuelling the ambition of commit to the project problem because, if you people in the area through by purchasing a card ostracise the family, you that allows them to the work we’re doing” start to destabilise the select a tree and pick ecosystem in coffee-growing areas. coffee direct from it. The company has committed further in the community by “To get around that we asked building Paddy & Scott’s Ruiga School. questions, involved the community. We Scott said: “My clients have built that built washing stations and fermentation tanks on the farm so the Muchomba family school – and they should be so proud. These days consumers always ask where don’t have to take their coffee miles away their coffee has come from.” via donkey or bike to washing stations.

The Gentlemen Baristas co-founder Henry Ayers and people do care about them. Henry Ayers, co-founder of LondonCommunity, sustainability, authenticity based coffee shop brand The and aspiration are at the core of our Gentlemen Baristas, told delegates identity. They all link and you can’t the company would see sales growth have one without the other. We up about 40% by the end of this wanted to bring hospitable back to year, with intentions to “double that the hospitality industry. It’s important next year”, while retail sales were our customers receive a genuine increasing month-on-month. welcome. Well-mannered coffee The Gentlemen Baristas opened its is central to how we roast, sell and ninth site, in New Oxford Street, in the communicate, and who we employ.” summer, with a tenth store to follow The Gentlemen in Victoria and another “It’s important our Baristas opened its first likely in Hammersmith. customers receive a site in 2014 at a “quite A coffee school also genuine welcome. Wellremote” location in opened at its roastery mannered coffee is Southwark. However, in Whitechapel at the central to how we roast, Ayers said: “If you’ve end of June. Ayers told sell and communicate, got something that’s delegates he would and who we employ” decent, people are look to take the brand willing to make the journey. For us it outside the capital and also abroad, with people approaching the company was about word of mouth. Instagram was massive as well.” about franchising in the Middle East, Word of mouth has been vital for Germany, Italy and Canada. He said the company’s site next to Borough when he and Ed Parkes launched Market too, as council measures led to the brand they knew The Gentlemen the removal of A-boards and benches Baristas required a distinctive look that encouraged customers off the and offer to stand out in an “ubermain drag. Ayers said: “Again, it’s crowded” sector. Its ethos and tagline word of mouth. When we celebrated is “well-mannered coffee”. our first anniversary, people were He said: “Manners are key – queuing out the door all day.” they’re important, they’re neglected

Press Coffee co-founder Andy Wells, Caravan co-founder and creative director Laura Harper-Hinton, Bewiched Coffee founder Matt Fountain and Black Sheep HR director Marco Reick discussed the sector’s challenges and how to overcome them. Regarding recruitment, Reick said he was worried about what might lie ahead. He said: “More than 50% of our workforce are from the EU and we love the diversity of our workforce. If we don’t have a recruitment crisis now, it’s potentially on the horizon. The only thing we can do is look after our people the best we can and everyone benefits from that, including the customer.” Fountain, however, has fewer than 2% of EU workers at its mainly Northamptonshire-based sites. He said: “Our bigger concern regards our site at Rushden Lakes, where we’re having to compete with a mass of retailers’ pay grades when it comes to recruitment.” Wells said: “Unfortunately the really good baristas in London can ask for what they want so we’ve brought our training in-house.” Harper-Hinton said: “We’re focused on creating an environment where it’s fun to come to work. If you create a really positive environment you will attract great people. We’ve got our own barista school so we’re also building a pipeline and succession plan for senior positions.” Regarding sustainability, Reick said: “One of our values is to get rid of plastic and talking to Sam Roberts, of Boston Tea Party, we are definitely looking at banning reusable cups.” Fountain said: “We use a metal, reusable cup for customers who consume cold drinks in-house and we have paper straws.” Press Coffee operates an electric delivery van. Wells said: “We put all our wholesale and shop coffee into reusable buckets but cups are the major issue. I think that will be solved by a levy. It worked with plastic bags and if the government enforces 5p or 10p on a cup, I think things will change massively.” Harper-Hinton said: “We’ve got sustainability champions front-of-house and in the kitchen. We have no singleuse plastic and give 50p discount to people who bring their own cup in or sell our own bamboo version. Plastic straws have become a bit of a red herring for sustainability. We took beef off the menu in 2017, which can really make a difference. We’re focusing on the big picture, not just the small things.” AUTUMN 2019 PROPEL QUARTERLY


Opinion Mr Fogg’s House Of Botanicals

Getting the look

Ann Elliott asks whether aesthetics matter or is it simply Instagram hype?


e are about to conduct our 250th research project at Elliotts. Throughout our years in qualitative research, on many occasions we’ve heard focus groups discuss topics that have developed into

In the survey we interviewed 1,000 UK consumers and found more than two-fifths (43%) agreed with the statement “I have visited a venue just because of how it looks”. Not everywhere can be as beautiful as German Gymnasium, of course, winner of world’s best overall restaurant in the International Restaurant major trends. & Bar Design Awards. However, it’s clear a restaurant’s “look Lately we’ve noticed design and how venues look have and feel” is incredibly important to consumers. Those brands become “go-to” topics of discussion. In fact, in our four that don’t invest regularly in their interiors quickly fall behind most recent consumer focus groups design was the first item regarding customer appreciation, interest and engagement. mentioned in terms of a venue’s appeal. It used to be food quality Toilets are a huge factor, of course, when thinking about but the gap between food and design appears to be closing customer experience – 50% of customers who use the toilets in a rapidly in terms of motivating a visit to a restaurant, pub or bar. venue will talk about them with family or friends and 30% believe a Of course developing a beautiful space isn’t a new concept bad toilet experience is unforgiveable to the extent of not wanting but the ever-growing popularity and upsurge in the use of social to return to the restaurant. Toilets are often the first (and sharing platforms such as Instagram has meant the sector last) thing customers see in a venue so their decor has is increasingly spending more time considering the to be a key priority for designers and be consistent look and feel of their spaces. “Those brands with the wider restaurant theme.

Mr Fogg’s House Of Botanicals

that don’t invest

Dean Concannon regularly in their Inception Group’s Mr and Mrs Fogg’s bars Recently we have been working alongside interiors quickly fall are a case in point. They are exceptionally Dean Concannon, design director at Harrison well curated and follow their themes with behind regarding Design, who told us how unsettling it can be huge attention to detail. In Mr Fogg’s House customer appreciation, for customers to walk from a dimly lit eating Of Botanicals (pictured above), for example, interest and space into a bright utilitarian bathroom. It takes Instagram opportunities begin the moment a engagement” them out of the atmosphere that has been so customer walks through the flower arch to enter painstakingly created by the designer into a whole a green and open space with plants (and images new arena that can cheapen the whole experience. of plants) dominating the environment. This is a venue It was clear in our survey that women value aesthetics and dedicated to all things “garden like”, from the design to interior decor more than men. More than three-quarters (76%) of the menu and food and drink presentation. It is stunning – and the women we interviewed agreed an attractive venue interior is usually packed. highly important to the overall customer experience, while twoThis isn’t simply a “millennial thing”. In a recent Elliotts thirds (67%) of women we interviewed strongly agreed appealing survey we found almost one-third (30%) of Generation X had interior decor would encourage them to visit. Of the men we taken and posted a picture while in a restaurant in the past three interviewed, on the other hand, more than half (51%) thought an months. This shouldn’t be a surprise as we use all our senses to appealing decor was only “somewhat important”, while almost understand and interact with our surroundings. We don’t just two-fifths (37%) neither agreed nor disagreed the look of a venue taste the food we eat, we take pleasure in how it looks – the had little impact on their intention to visit a brand. height, plate fill, colour and texture all play a role in our sensory Time and again research has told us women are the lead experience. Many studies have shown presenting a basic dish decision-makers when choosing where to eat out. As our beautifully means people will pay, and enjoy it more, than an research confirmed, they are much more interested in decor than average presentation. It makes sense then that the beauty of a men, who tend to be more focused on menu choice, food and ▲ venue will also feed into this enjoyment equation. AUTUMN 2019 PROPEL QUARTERLY



Dean Concannon

Flight Club

service. In our survey, 91% of the men we interviewed agreed food was “highly important” in their visit, while 86% agreed service was “very important” when persuading them to use a venue. Furthermore, almost two-fifths (39%) of men neither agreed nor disagreed it was important for a brand to follow trends in decor and a similar number (38%) neither agreed nor disagreed a venue becomes dated if it doesn’t refresh its decor. Almost half (46%) of the women we interviewed said they had chosen where to eat based purely on how a venue looked, whereas three-fifths (60%) of men said they had never visited a venue purely on that basis. This is supported by the fact more than four-fifths (81%) of women surveyed said they had shared photos of their food and/or dining occasion on social media, with more than one-fifth (22%) of those pictures shared on Instagram. In complete contrast, more than three-quarters (76%) of men said they hadn’t taken a photo while out dining in the past three months. While statistically we can see design is becoming a more telling factor in a consumer’s decision to eat out, to understand the nuts and bolts of creating great spaces we spoke to Concannon again about how he sees the role of design in the customer journey. He has worked with a huge array of clients, including Nando’s and Giraffe, and has a deep knowledge of venue design across a breadth of concepts and price points.

Instagrammable features As expected in terms of current trends, the briefs he is receiving from hotels, airports and restaurants all look to ensure their venues include Instagrammable features in their final designs. He doesn’t believe, though, the role of Instagram is limited to our sector having recently seen an estate agent with a vast dried flower display around its windows and doors. Interestingly, once a real USP for venues such as Elan Café and Peggy Porschen, so many venues now have this decoration it has become something of a cliche. Concannon believes an Instagrammable feature has to be appropriate and unique to a venue – simply putting dried flowers around an entrance is not going to cut it with consumers for much longer. However, an Instagrammable feature is great for generating awareness and tagged content for a venue and it may be the most lasting impression from a visit owing to its immortal status on the internet. Concannon believes, however, this feature is likely to attract a consumer’s attention for no more than 30 seconds before they have taken their picture, posted it online and been seated (perhaps not even facing said feature). At this point in the visit other design elements will be of greater importance to the diner than flowers in the entrance – such as how far apart are the tables, how good is the lighting at creating an atmosphere, and how comfortable are the tables and chairs? Concannon believes it’s incredibly important to have a holistic approach to venue design, from the handles on the front of the door when customers enter a restaurant to those on the back of the door when they leave. Operators should create dining environments where customers don’t feel the need to look at their phones all the time but feel relaxed and detached from the worries of everyday life.


He argues a lot of brands simply don’t do enough to help their customers escape the daily grind, citing casual dining chains as key culprits where the on-site experience doesn’t go much beyond simply being fed. In these cases, customers can easily come to the conclusion they could have stayed at home and had their meal delivered. Many operators are having to rethink their restaurant design during a brutal period of trading and rising staff costs and food prices. The key trend in hospitality at the moment is towards the experiential, with the rise of competitive socialising concepts such as Puttshack and Flight Club as well as activities such as escape rooms. Their interiors are brilliant but demand investment – and regular investment at that. Our research demonstrated aesthetics are increasingly important across the whole of the casual dining sector, not just high end or experiential, and even here customers may expect to eat in a stimulating environment that separates them from their everyday life. Operators are increasingly mindful of this and the scale and speed of change required to keep up with the needs and expectations of their customers. Typically, according to Concannon, operators refurbish a site every five of consumers in an to seven years, while Elliotts survey agreed those refurbishments often cost roughly onewith the statement “I third of the value of the have visited a venue just initial site. Of course because of how it looks” “sparkles”, which are cheaper and quicker, often help extend a design’s lifespan but Concannon says he has seen little long-term commercial impact from such small-scale investments. If a site is dated already, a sparkle can be a waste of money – the downward sales and covers slide isn’t reversed and the operator can be thousands of pounds out of pocket. He has seen more success when operators have bitten the bullet, invested in full refurbishments, avoided trends and fads, and kept things simple – improving the life expectancy of the investment. The landlord for retail spaces in Petronas Towers in Kuala Lumpur, Malaysia, for example, demands tenants gut their unit and rebuild at least every five years. While that wouldn’t fly in the UK, it offers an insight into the attitude of hitting refurbishments hard at regular intervals rather than undertaking minor works – adapt or die. Our research once again confirmed customers are becoming more demanding about aesthetics, design and experience, while the economic environment is making the investments that deliver these even harder to justify. Once again, customers must be listened to.


Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – ▲


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