Propel Quarterly Spring 2017

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uarterly We’ve got your 2017 covered

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ISSUE 18 • SPRING 2017

The pick of the Premier League and so much more live sport this month, including:

Birmingham v Leeds

Man Utd v Bournemouth

Tottenham v Everton

Sunderland v Man City

West Indies v England

West Ham v Chelsea

Celtic v Rangers

Southampton v Man Utd

Man City v Liverpool

Australian Grand Prix

Friday 3 March, 7.45pm Sky Bet Championship

Sunday 5 March, 4pm Premier League

Arsenal v Leicester

Saturday 11 March, 5.30pm Premier League

Premier League Darts Thursday 16 March, 7pm PDC Darts

Saturday 4 March, 12.30pm Premier League

Sunday 5 March, 1.30pm ODI Cricket

Sunday 12 March, 12pm Scottish Premiership

Sunday 19 March, 4.30pm Premier League

Sunday 5 March, 1.30pm Premier League

Monday 6 March, 8pm Premier League

Sunday 12 March, 1.30pm Premier League

Sunday 26 March Formula 1®

Plus, coming soon:

Run in - April & May

Thursday 6 - Sunday 9 April

Saturday 20 - Sunday 21 May

08448 245 670 Fixtures may be subject to change. Sky Sports requires a Sky subscription, equipment and installation. Further terms apply. Calls to Sky cost 7p per minute plus your provider’s access charge. Correct at time of print 10.02.2017. THE F1 LOGO, F1, FORMULA 1®, FIA FORMULA ONE WORLD CHAMPIONSHIP, GRAND PRIX AND RELATED MARKS ARE TRADE MARKS OF FORMULA ONE LICENSING BV, A FORMULA ONE GROUP COMPANY. ALL RIGHTS RESERVED.

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

Capital to the core ETM Group founders Ed and Tom Martin

Inside: Courageous coaching The Clink restaurant Cut the millenni-babble Epic Pubs to revitalise the gastro-pub genre Tackling the business rates burden A mature market needn’t grow old Learning from the US market East meets west


ISSUE 18 • SPRING 2017

“They’ve got the balance just right.�



Tailored support for you and your pub. When you choose Star, we work with you to ensure that you and your pub are well looked after. We provide a balance between giving you freedom to run your 31',#11 5&'*12 -j #0',% 13..-02 5&#,#4#0 7-3 ,##" '2@ &#2&#0 '2a1 5'2& -30 Star Food programme, one of our Raising the Bar workshops or working with you on the full refurbishment of your pub, we aim to make you and your business as successful as possible. Start your application at or call us on 08085 94 95 96






Cut the millenni-babble


Capital letters


Tackling the business rates burden


A mature market needn’t grow old


Courageous coaching


Advanced Marketing and Insights Masterclass

by Glynn Davis

ETM Group founder Ed Martin talks to John Porter

by Kate Nicholls

by David Martin

by Chris Edger and Tony Hughes

in pictures


More Booma than bust


The Clink restaurant


East meets west


British bulldog our foodservice industry proves its resilience

London Village Inns owner Martin Harley talks to Glynn Davis

by Katy Moses

by James Hacon

by Cyril Lavenant



Delivering the brand


Epic Pubs to revitalise the gastro-pub genre

by Steven Pike

Andrew Coath & Mark Austin talk to John Porter


Highlights from People and Training Conference by Kate Oppenheimer



Night of the NITAs


Deciding factors


Learning from the US market


People Power

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Cut the millenni-babble Glynn Davis admits millennials are central to the industry but argues ‘do we have to hear about it all the time?’


ne of the annoying things I’m finding on getting older is everything is geared towards the millennials. Yes, I know they are the future but do I really have to read yet another industry survey telling me just how important this 18 to 34-yearold group is? They certainly know it – so I don’t feel the need to hear about it incessantly. The reason for such a barrage of information on this group is because statistics about their activities are so compelling. Research in the US by consultants McKinsey found millennials’ collective wealth is expected to double by 2025, while their spending power is likely to treble. However, we don’t have to wait until then to feel the impact of millennials because they are already splashing plenty of cash around now – and it is having a dramatic effect on the food and beverage industry. While I sit around moaning about the media’s obsessive focus on this group – and it sometimes feels like it is to the detriment of the rest of us – the reality is they are out and about spending. A recent report by CGA Peach and Barclaycard certainly put things into perspective. It found half the eating out undertaken in the UK can be attributed to the largesse of 18 to 34-year-olds. More than half of these millennials eat out at least weekly and a third do so at least three times a week. In contrast, fewer than one in four over-55s eat out at least weekly, while a sizeable one in seven has not eaten out at all in the past six months.


Perhaps this should not be a surprise as factors such as less mobility could be driving older people to spend more on home-delivered food. Well, not exactly, because fewer than a third (30%) of over55s have had food delivered to them in the past six months. Yet again it is the millennials doing the spending in this rapidly growing area – a massive 85% of them have had food delivered to work, home or a friend’s house in the past six months.

thing, which has fuelled a desire to seek out the latest restaurants. CGA Peach and Barclaycard found 25% of millennials consider themselves to be among the first to visit new eating and drinking brands. They then share their experience with others through social media. This constant search for “newness” must be a factor behind the record levels of churn being experienced in the restaurant industry, as record openings are almost matched by unprecedented levels of closures.

“With such spending power being exerted by millennials, it’s really no surprise fine dining has taken a hit and we find ourselves in a casual dining era”

Working generation

With such spending power being exerted by millennials, it’s really no surprise fine-dining has taken a hit and we find ourselves in a casual dining era. Even “smart-casual” is a step too far for some sections of this younger community – god forbid any sign of a linen tablecloth appearing in dining establishments. As this group ages it will be interesting to see whether they adopt some of the “softer” aspects of dining they shun today. The media is also obsessed with the millennial generation’s use of social media, which is also having an impact on eating out. The voracious appetite of social media accounts is driving this group to constantly search for the next new


Another area of the industry that has the imprint of the millennial written all over it is the blurring of work and social activities. This is being seen most obviously in shared workspaces that also feature craft beer-stocked bars and on-tap entertainment. This has been taken a step further by Martello Hall in Hackney, which Albion and East Group has opened to cater for the “millennial working generation”. Coffee and hot-desking by day seamlessly moves into cocktails, 12 wines on tap, an on-site gin distillery, and DJs playing music into the early hours. I’m not sure I could handle this mix to be honest – the work side of the equation might suffer slightly. However, it’s clearly not aimed at me and, if the multi-tasking millennial group can handle it, then good on them. As I said, they are very annoying.

Glynn Davis is a leading commentator on retail trends

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Feature Aviary – tenth floor roof terrace

Capital letters

ETM Group co-founder Ed Martin talks to John Porter about the company’s growth, its high-profile venues and why it is sticking with London


ifficult though it may be to imagine today, a career in the pub trade hasn’t always been seen as a first choice for budding young entrepreneurs. Ed Martin, who with brother Tom set up ETM Group in 2000, recalls there were “some raised eyebrows in the Martin family” when they announced their intentions. Martin recounts the origins of the business while sitting in Greenwood, the high-profile, two-storey restaurant and bar opened by ETM in the Nova development in Victoria, London, in January. The Greenwood opening came soon after confirmation that ETM’s pre-tax profits had passed £1m for the first time. With the business named group operator of the year at the Eat Out Awards in November 2016, as well as being placed on the London Stock Exchange’s “1,000 companies to inspire Britain” list earlier in the year, ETM’s position as a front-runner among London’s hospitality operators seems secure. However, it is worth recalling that the capital’s eating out scene looked a little different as the 20th century came to a close. Martin says: “In the late 1990s, when the gastro-pub really got started, Tom was living in Notting Hill and we were lucky enough to use The Cow and The Westbourne at the time. They were the inspiration but there wasn’t a great pub on every corner, the London restaurant scene still hadn’t kicked off at that stage and so we saw an opportunity and went for it. It wasn’t seen as the most glamorous thing at the time – but that was the opportunity. We put our case forward, and it was right. After that our family supported us and have supported us heavily ever since.” The first ETM site was The Well in Clerkenwell and the Martin brothers pitched their offer at a new breed of young professionals, much like themselves, who were looking for a new kind of venue. Martin says:“It was an area that was underserviced, packed full of people, with really cool media offices everywhere. We came up with an offer that appealed


Ed Martin (left) with brother Tom

so we were busy from day one. Of course, we made tons of mistakes, as you should when you’re starting out, so it was a really steep learning curve.” However, despite that curve the venue was “immediately doing, in the year 2000, more than 20 grand a week, which was wonderful.” Martin adds: “We were fortunate in that we managed to buy the freehold so it became the cornerstone of our growth. We had security, we could borrow against it, and we were off to a flying start.” In terms of the number of outlets it operates, it could be argued ETM’s growth has been less spectacular than some of its rivals. Although a few sites have joined and left the business in the 17 years since ETM took on The Well, the Greenwood opening means there are currently 12 sites in the portfolio, with only one outside London.

“It was an area that was underserviced, packed full of people, with really cool media offices everywhere. We came up with an offer that appealed so we were busy from day one. Of course, we made tons of mistakes, as you should when you’re starting out” The company’s figures tell the real story, though. ETM’s relatively small number of sites generated turnover of £22.8m in the year to the end of February 2016, generating pre-tax profits of £1,058m. The estate includes a diverse portfolio of businesses, ranging from pubs with a traditional feel such as The White Swan in Fetter Lane and The Jugged Hare at the Barbican to modern bar restaurants, including two Botanist sites in Sloane Square and Broadgate Circle. ▲



Greenwood Bar

Since the period those results cover, ETM has opened three further large, high-profile businesses in new London developments. Two are at the new Royal London House hotel in Finsbury Square. The first, Burdock, is a 2,000 square foot bar with 100 covers offering breakfast, lunch and dinner, bar food, cocktails and craft beer, including tank beer. Also at Royal London House is Aviary, a 6,000 square foot rooftop restaurant and bar open daily from breakfast to dinner, with a 2,000 square foot south-facing terrace offering spectacular views of the City skyline. Greenwood is part of a £2bn residential and leisure development, which will be fully open later in 2017, offering 18 new eateries in total. At 11,000 square feet, the pub and restaurant is ETM’s biggest site to date – unless, as Martin points out, Burdock and Aviary are factored together, although operationally they are run as separate businesses. Greenwood has a core offer that runs from breakfast to pre/post-theatre dining and dinner, as well as a broad drinks range, again including craft and tank beer. The upstairs bar has five screens showing a range of domestic and international sport, along with an American pool table and shuffleboard tables. As well as an 80-cover outdoor seating area, less conventionally the ground floor includes a barber’s shop and brow and lashes bar, run as concessions that pay a proportion of revenue to ETM.

Prestige Greenwood Bar

Burdock restaurant

The Botanist’s Club and Cocktail Lounge Soda Room



The scale and prestige of these latest openings reflect the London market sector ETM has made its speciality, says Martin. He adds:“We’ve made a conscious decision to open larger and more wet-led venues. That means there aren’t that many venues of the size we want available but equally there aren’t that many competitor operators who can do this size. So while our opportunities are limited, for that very reason the competition isn’t as fierce as it is in other sectors of the London market. “Over the years we’ve built great relationships with the major developers and landlords in London and we’re proud to nurture those relationships. I think we sit in a really good place, where we’re a go-to operator, because developers know we deliver on time and in the quality of the offer – as well as on budget, which is important to us.” Martin cites the Royal London House development by the Montcalm Hotel Group as a good example of the relationship in action. “They know they can rely on us as their food and beverage partner to maximise both of our revenues. It’s a really interesting model and we’ve enjoyed working with them.” With Greenwood, the opportunity was clear. Martin says: “Victoria has always been a wholly underserviced area of London as a place to eat. It has very high density yet is woefully inadequate in terms of food and beverage. That’s now changing.” For ETM’s founders, the expansion of the business has inevitably brought about changes in their working day. Martin says: “It’s totally different, I’m not doing what I did ten years ago that’s for sure. It comes with new challenges that are really exciting and I’m still learning new things every day, which keeps it interesting.” ▲

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Feature Burdock restaurant


ETM Group appeared on the London Stock Exchange’s ‘1,000 companies to inspire Britain’ list for 2016

However, some fundamentals haven’t changed. Martrin says: “Our offer in a nutshell is heritage, seasonality and provenance.” All food is prepared fresh, with regular menu changes to reflect seasonality. The drinks range at each site includes craft beer from the ETM-owned Long Arm Brewing Co, based at the group’s Ealing Park Tavern in west London. Martrin says: “We also create a bespoke cocktail list for each site, using interesting, innovative

flavours.” This core approach to the food and drink offer, combined with the aspirational nature of the venues themselves, generates “excellent customer loyalty and repeat visits”, says Martin.

Opportunity-led He adds: “The customer base is very professional-led, they are basically the same people at all our venues across London, from east to west. A typical customer might work in the City, live in Chelsea and use a number of ETM venues – we get massive cross-use.” The food and drink sales mix varies from site to site. Martin says: “Some of our businesses are 80/20 food and some are 50/50, with a range in between. I’m happy with that because we are opportunity-led, given the property market, and it means we can open anywhere.”

“Some of our businesses are 80/20 food and some are 50/50, with a range in between. I’m happy with that because we are opportunity-led, given the property market, and it means we can open anywhere”

Greenwood bar‘s zebra taxidermy


The key to success at each site is getting “all bites of the cherry”. He adds: “The Jugged Hare is great example. From Monday to Friday there’s lunchtime trade from the City, then great events trade in the evening because of the Barbican and the cinema nearby and, at the weekend, it’s a destination site. It’s just making sure the venues are used to the maximum potential, day in and out, and every square inch.” Design is also key. Martin says: “We spend a long time making sure no two venues look the same, that they always have a different feel. You can experience them in different ways at different times.” More than 500 staff across the business deliver the ETM offer to the high standards set from the top. Martin says: “We invest a great deal in our training programmes and staff welfare.” That includes core training for all staff, delivered in weekly sessions on areas such as wine, food and service, first aid, food hygiene, and health and safety. ▲


Feature Greenwood, Nova – ground floor bar

There is a tailored development programme for front-ofhouse staff who have the ambition and potential to become managers, which leads into the ETM Management Academy, a two-level programme developed in-house. The next step is a five-level workshop-based course, covering areas such as HR, systems, service, people/development and financial, with key staff also given the opportunity to achieve Level 2 Wine Spirit & Education Trust certification. Retention levels are high, with a strong emphasis on incentives, including weekly and monthly sales incentive prizes and a mystery diner scheme, which offers a cash bonus for high service standards. Martin says: “With new sites, we always aim to do half-and-half – half new people and half appointed from within the business – so there’s always a career path, an opportunity to move up the ladder.”

“We go through a concept development stage for each site; we want to constantly surprise our customers” Chef recruitment is a big a challenge for ETM as it is for every operator. Martin says: “I don’t see any abating of that challenge, it’s an extremely difficult part of the business. Having said that, no menu is identical to another. We’re not a chain, we don’t enforce dishes on the chefs, so there is an opportunity to create their own dishes. In that respect, it’s interesting, our chefs are working with the best produce possible and our kitchens are nice environments to work in, which is so important. All of those are positives.” The fact most produce is sourced from British suppliers will protect ETM from some of the expected impact of food and drink inflation, with target gross profits currently being maintained. Martin says: “We’re sourcing from bespoke small suppliers who we can rely on, because we’re important to them, and we have relationships going back years with many of them.” Martin praises cross-industry initiatives by trade bodies, including the Association of Licensed Multiple Retailers, to address staffing needs. He adds: “It needs a concerted effort from everybody in the industry to change things. London is growing, there are more restaurants needing more staff and maybe the tap’s going to get turned off in two years’ time. Brexit is a huge risk, if the flow of migration is reduced significantly it is a massive problem for our industry.” Overseeing the day-to-day delivery of standards is operation director Bridget Croft, who “has fantastic systems in place”. Martin makes the point customer expectations are higher across the board than when ETM began, and the advent of social media makes feedback both instant and public. He adds: “You cannot get away with anything. What’s amazing about London is the


width, breadth and depth at every price point. It’s superb and, as a result, quality has risen exponentially.” The addition of “extras” such as big screen sports, shuffleboard and, of course, that barber’s shop and brow bar at Greenwood, reflect the need to keep the offer fresh. Martin says: “We go through a concept development stage for each site; we want to constantly surprise our customers. We want hooks other than just eating or drinking, it’s important for people to know they have something else to do. Fundamentally, though, our core business is selling food and drink, and we are offering extra things to complement that.” Although ETM took on a pub in Suffolk in 2015, Martin expects all future growth to be within the capital – “we’re a London operator”, he says. Funding new ventures has required exiting some others, including The Gun in Docklands, which was an early ETM site, with the freehold sold to Fuller’s in 2016. Martin adds:“The Gun was very dear to our hearts but, in terms of future growth of the company, it made sense to dispose of it – and we got a great price. It released funds and has enabled other opportunities to be realised that are more central to our ambitions.” The expectation is also that future sites will be part of new developments rather than taking on existing operations. Martin says: “We’ll always look at anything but new developments are great because we start from fresh. There are developments everywhere in London so there will always be opportunities. You just need to be in the right place and take them when they come.” Along the way, the Martin brothers have also invested in businesses outside the ETM umbrella, including Vietnamese restaurant chain Pho and ping-pong bar brand Bounce. “We’re really proud of our involvement in those companies,” Martin adds. Ultimately, though, the key to it all is the fact that “at ETM our name’s above the door”. Martin says: “That’s really important to us, it means we want it to look right, to get the offer right, to invest the right amount of money and offer the highest quality possible. Having our name above the door is reassurance for our landlords, they know we’re going to stick to our word.”


What would be your ideal evening out? “I’d start with a cocktail at the Botanist, then go to The Jugged Hare for dinner – and I’d order the jugged hare, if it’s in season. Then I’d end up at Burdock playing shuffleboard until late into the evening.”

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Insight Penalising pubs

Good health


Ensuring the well-being of the sector involves tackling the business rates burden, says ALMR chief executive Kate Nicholls

t was refreshing to read recently of scientists from Oxford University insisting we all need a trip to the pub for our well-being. “Dry January” had to be abandoned, they said. Research from Oxford’s psychology department found drinking in a pub improved social cohesion and improved well-being. People who frequented a local regularly were more likely to feel content and connected, more engaged socially and more likely to trust other people in their community. Given our tumultuous year, we could all do with more of that. Socialising in the pub – our longestablished social network – makes all the difference. Professor Robert Dunbar, who carried out the research, said it can “directly affect people’s social network size and how satisfied they feel with life... the single most important buffer against physical and mental illness”. Unfortunately, the government’s longawaited Industrial Strategy revealed no investment in bricks and mortar and human interaction. Instead, the government looked at encouraging investment in high-tech sectors – seeking to support strategic growth champions while failing to recognise the ones under its nose. More than half of all jobs created since the financial crash have been in the broader hospitality and tourism sector. We are now the fourth-largest employer in the UK and have grown by more than 13% during the past decade. Over the next five years, we are forecast to deliver the same level of growth, jobs and investment – in half the time. But that potential is at risk from the wall of unforeseen regulatory costs heading our way.


Operating costs are at their highest level in a decade – almost half average turnover – and the amount paid in taxes has also crept upwards to more than a third of turnover. Something has to give for the sake of the nation’s well-being. Top of the list is business rates – a fixed cost and key determinant of outlet viability. We are the secondhighest taxed property market in Europe and pubs and restaurants are disproportionately hit – paying more than 15p a pint in rates while supermarkets pay only 5p. Under the new revaluations, pubs and restaurants are also seeing large increases to subsidise business rate cuts being offered to other sectors. We estimate we are paying £500m more than our fair share as a result.

“More than half of all jobs created since the financial crash have been in the broader hospitality and tourism sector” Rising property costs are an increasing burden and arguably the sector’s main threat. Despite continual pressure from the Association of Licensed Multiple Retailers (ALMR) and some significant victories, a wholesale rethink of business rates for licensed hospitality has yet to materialise. The switch from a spring budget to an autumn one will give us two opportunities to push for reform this year and it is to be hoped the government is prepared to act on the concerns of businesses.


The ALMR has argued for a more responsive and equitable business rates system for pubs, particularly in the way they are valued. The current system of “fair maintainable trade” is unfair and penalises successful pubs, undermining growth and investment. Pubs saw an average increase in rateable value of 15%, with 23% for restaurants. Even with the government’s transitional reliefs, the sector is set to shoulder an extra £300m to £500m in rates bills. Even with the increase in small business rates relief and the extension of the small business multiplier, almost half of all properties (47%) are seeing an increase. The revaluation also means fewer premises than ever are classified as small and there are 51% more premises classified as “large businesses” and seeing up to a 45% increase in bills in the first year – it is this that makes the new regime so unsustainable.

Give ground This is not just a London phenomenon, with a community pub in Stoke looking at a 334% bill increase and a Home Counties country pub a 400% rise. Clearly the government needs to give some ground to prevent profitable venues going bust. The ALMR will continue to push for reform and look for a more nuanced approach to rateable value and a move away from fair maintainable trade to stop penalising successful pubs. We want a fair and responsive appeals system that eliminates hypothetical judgements and ensures fairness for pubs and substantially increased transitional thresholds to redefine large pubs and allow businesses time to absorb costs. The Scottish government has just voted on the first stage of its budget, with the spectre of increased business rates looming over proceedings. Scottish MPs are starting to realise exorbitant business rates are a brake on growth and, ultimately, do more harm than good. The leader of the Scottish Conservatives highlighted a complaint from the SNP about the increased cost of room hire, food and drink at their local pub as a result of increased bills. “Cost pressures and regulation can break down social networks too,” she said. The message is clear – if the government is serious about backing strategic growth champions and funding investment in social cohesion and social networks, it needs to back the pub and hospitality sector. It is not just good for UK plc, it is good for our health. With sustained industry pressure we can ensure Westminster gets this message and, with some persistence, begin to see a new approach to an issue that has undermined licensed hospitality for too long.

Kate Nicholls is chief executive of the Association of Licensed Multiple Retailers


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A mature market needn’t grow old


rrespective of where you stand on the Brexit spectrum, there can be little doubt the eating out market is going to get tougher as the price increases relative to supermarket food, just when consumers’ discretionary incomes are going to be squeezed. With the glorious benefit of hindsight, for consumer markets 2016 was probably as good as it gets for a while, with household disposable income growing by about £12 a week, according to the Office of National Statistics. Now, some forecasters suggest discretionary incomes will decline in 2017. But what about market supply? The latest edition of the CGA Peach/AlixPartners Market Growth Monitor reported broadly flat numbers of food-led licensed premises. However, a stand-out feature was the growth of food-led pubs and bars, particularly branded food pubs. “Systemised” pub food is a child of the 1970s, the dark days of bellbottoms and Benny Hill. Since then it has enjoyed sustained success but faces some significant issues for the future. This article focuses on four of those issues:

Dependence on the older consumer Pub dining has a long-standing skew towards the older age groups. This is a link to its origins, when rival branded restaurants were few and far between – if you were 60 in 2016 you attained legal drinking age at the same time that McDonald’s opened its first UK store. Pubs still trade strongly to this generation, an age group that has fared comparatively well financially since the downturn. But as every year passes this is yesterday’s consumer, one who didn’t have the hugely diverse formative eating out experiences available today. There is a marked demographic difference between the brands in pub food and casual dining – CGA Peach’s

Brand Track data shows, on average across the pub food brands, about 36% of customers are aged 55 and above. However, for casual dining brands that falls to only 26%, and even though population forecasts show growth in the older age groups, the fastest growth is in the very old – and the “younger old” of today are vastly different in their food tastes and experiences than previous generations.

To continue its domination of the inexpensive social eating occasion pub food needs to avoid ageing with its core customers, says David Martin

‘Legacy’ cuisine Pub cuisine’s roots lie in its historic core competencies of fried and grilled meat-heavy dishes – blokey food for a blokey environment as it was then – an on-the-plate version of “pile it high, sell it cheap”. That blokey tone wasn’t just a feature of the pubs but it also applied to the headquarters – I recall the disdain vegetarians were held in by some senior pubco colleagues in my youth. We have come a long way when we see Mitchells & Butlers’ All Bar One embracing this year’s “Veganuary” message. ▲

“‘Systemised’ pub food is a child of the 1970s, the dark days of bellbottoms and Benny Hill” ¡ SPRING 2017 ¡ PROPEL QUARTERLY



30% “of pub dining brand users tend to give ‘top-box’ ratings for food quality”

But pub food’s roots are still showing, and you’d be tempted to say being male, meaty and mainstream would be about as off-trend as possible in today’s market – or to borrow an enduring punchline, you wouldn’t start from here. That’s especially true in relation to today’s educated metropolitan consumer, the demographic that largely sets the cultural agenda, with their evident desire to be “healthful” in their food consumption.

Suburban stronghold The pub dining brands are inherently suburban – and that’s not where the educated metro consumers now choose to live. Nor is it the dynamic hub of today’s eating out market. New openings are focused on the city centres – particularly those with graduate employment – whereas suburban pub numbers are in mediumterm decline. This suburban/metro dimension is not just geographical but almost certainly influences brand imagery too. In an era when social media encourages consumers to need to be noticed and to be interesting, it is telling that CGA Peach’s Brand Track data shows restaurant brands are typically about three times as likely to be associated with the words “exciting” or “cool” than pub dining brands.

“CGA Peach’s Brand Track data shows restaurant brands are typically about three times as likely to be associated with the words ‘exciting’ or ‘cool’ than pub dining brands”

Customer ratings The principal challenge to pub dining is probably its food quality. Whichever market research or feedback metric you favour, the evidence repeats itself – food quality is the biggest driver of customer approval and, when it fails, is a key dissatisfaction factor. CGA Peach’s Brand Track data shows pub dining brands as a genre enjoy a reputation advantage over restaurant brands on value for money, typically by about five percentage points. However, they have also consistently underperformed restaurants for food quality, by a similar margin.



Not only that, but only about 30% of pub dining brand users tend to give “top-box” ratings for food quality, and these kind of consumer metrics are, as a whole, not improving over time, while the branded market gets ever more crowded. That’s without dwelling on the pernicious issue of inconsistent experiences from visit to visit, which fellow students of customer feedback data will be all too familiar with. To that last point, I enjoyed a plain-speaking recent quote from Enterprise Inns retail concept director Steve de Polo: “If you aren’t consistently outstanding, you shouldn’t be surprised if customers go somewhere else.” But, of course, they already are. Brand Track data duly shows pub and restaurant brands tend to have as many lapsed customers as current ones. That won’t be all about novelty and promiscuity, it will be partly about reliability. But the challenge isn’t simply about directly competitive brands, it’s about the pub food sector’s continuing ability to defend its share of out-of-home food occasions. For a persuasive and resonant analogy, look to a recent piece in Business Insider discussing the serious challenges faced by Coke and Pepsi. It talked of how their core consumers haven’t simply given up on sugar, they are taking their “soda occasion” to Starbucks instead. A competitively superior value position will, of course, play well for pub dining in the tighter market ahead in 2017. But to be as successful in the future as it has been in the past in dominating the inexpensive social eating occasion, pub food needs to compete more strongly (and consistently) on quality and to avoid ageing with its core customers. A mature market needn’t grow old.

David Martin is managing director of market and customer insight resource Red Circle

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Courageous coaching Chris Edger and Tony Hughes explain that creating a ‘courageous coaching’ culture is particularly important in multi-site hospitality, where managers are required to come up with solutions themselves without reference to higher authorities


n our previous article, drawn from our forthcoming book, eMOTION! – How Inspirational Leaders Mobilise Superperforming Teams, we looked at the practices inspirational leaders deploy during the “10 Emotional Moments of Truth” during the employment cycle. Such practices, we argued, were purposefully designed to “move” people; mobilising positivity, shifting attitudes and behaviours, stirring feelings, resetting mindsets and galvanising teams into action. In short, creating eMOTION!

w Courageous coaching A process in which inspirational leaders drop their “expert leader” or “performance management” persona (a courageous act in itself!) to challenge and move false pre-conceptions of coachees

w Trusting one-to-one learning Space outside normal “performance reviews” where, with no hidden agendas, the focus is purely on personal development and increased effectiveness

“Courageous coaching takes place in a trusting one-to-one learning context where great leader-coaches help coachees raise their self-awareness and build accountability by challenging self-limiting mind-sets”

w Great leader-coaches help coachees Where the leader-coach facilitates and guides a coaching (and mentoring) process designed to improve and progress coachees’ goals

w Raise their self-awareness Following on from this, in the second section of the book, we explore the critical role inspirational leaders play in “leader-coach roles” – coaching and mentoring subordinates to higher levels of performance. It is our belief a key component of the inspirational leader’s weaponry is their capacity – as a leader-coach – to master what we call “courageous coaching”. What is it, why is it important and how do we recommend they do it? What do we mean by courageous coaching? This is our definition: Courageous coaching takes place in a trusting one-to-one learning context where great leader-coaches help coachees raise their self-awareness and build accountability by challenging self-limiting mind-sets, mobilising behavioural change and personal progression. But what is the significance of each component of this definition?

Focusing on uncovering “blind self” and false preconceptions that might be holding them back

w Build accountability To generate genuine ownership of a clear aim, solutions to overcome interference and a plan of execution

w Challenging self-limiting mindsets Reframing and breaking down false misconceptions of limitations and barriers

w Mobilising behavioural change and personal progression Leading to lasting behavioural change and sustainable progress ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Insight Why is it important? At an organisational level promoting a courageous coaching culture enhances general leadership skills and improves communications and relationships, generating a more harmonious, innovative climate. At an individual level it helps managers to establish clarity, meaning, learning, well-being and positivity. It is particularly important in sectors such as multi-site hospitality where – due to dispersal and distance – area and site managers are required to come up with solutions themselves, without reference to higher authorities. The techniques they learn from courageous coaching – by either doing it or being a recipient – heightens their levels of self-awareness and accountability, increasing their sense of resourcefulness and self-sufficiency.

Build rapport – at this stage, the leader-coach clearly sets expectations, defining respective roles and responsibilities, emphasising the coaching sits outside the normal performance review process. The important thing here is a fair degree of personal chemistry is established to enable an honest, open and challenging exchange.

Uncover aim – now it is the role of the leader-coach to help the coachee to surface a goal that is aspirational, tangible, realistic and clear to them. Coaching is “coachee driven”; it only works if the coachee is pursuing a goal that is meaningful to them. The art here is uncovering a legitimate aim that is impactful and measurable. Often coachees are unable to “see the wood from the trees”. The job of the leader-coach is to act as a dogged facilitator in establishing a goal of substance.

“At an organisational level promoting a courageous coaching culture enhances general leadership skills and improves communications and relationships, generating a more harmonious, innovative climate”

Identify interference – now the leader-coach must help the coachee identify the main barriers to them achieving their aim. In doing so, (s)he must establish their scale, importance and relevance. It is at this point (s)he must challenge self-limiting attitudes and behaviours, helping to create a sense of perspective and insight. Very often the greatest barriers to progress lie within ourselves rather than outside forces. It is at this point the leadercoach can help coaches expose their “blind self” and begin to understand how they themselves are their own worst enemy in reaching their goal!

How do inspirational leaders learn from it? What skills do they need and what process should they follow? From a skills perspective they require a fair degree of emotional intelligence, which will enable them to question, listen, mirror, probe, clarify, summarise and display a fair amount of agility and intuition. The process we suggest is our “build-raise” process of courageous coaching (see graphic), which enables leader-coaches to raise the awareness and accountability of coaches.








Determine execution – if the aim that has





Locate solutions – having isolated the main sources of interference, the leader-coach can unlock hope, confidence and energy by challenging the coachee to locate solutions that will enable them to move things forwards. It is important the coachee feels as if (s)he has located appropriate solutions, as this will drive the accountability to implement them (a key outcome in dispersed multi-site hospitality contexts).






been established is measurable, the interference to its achievement nullified through a number of viable solutions, a simple plan needs to be drawn up and agreed to ensure its execution. Here the leader-coach encourages the coachee to draw on all available support and resources to ensure success. Challenging milestones and timescales are set, with a follow-up meeting or call to evaluate progress scheduled for later on. In the book we obviously go into great detail on appropriate questions and coaching “tactics” (highlighting key “reframing” and “magic” questions that can shift feelings and perceptions). But the key point we make is this. Coaching is not a “soft, cosy chat” – it is a “hard” challenging intervention that should follow a specific process. Whatever subject the coachee alights on – career progression, personal effectiveness, performance enhancement or conflict resolution – it is the job of the leader-coach to facilitate discussion in a courageous and challenging way. Courageous coaching is an essential tool for the inspirational leader, promoting a culture of self-awareness and accountability among the recipients; essential in multi-site environments where the inspirational leader is often absent, too busy or does not have the answer to every problem!

Professor Chris Edger is a multiple author on retail leadership and Tony Hughes is a luminary of the European foodservice scene




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Marketing mysteries revealed Propel’s Advanced Marketing & Insights Masterclass took place at One Moorgate Place, London, in January presented by brands expert James Hacon

Oliver Taylor, of Elliotts, shares insights into where consumers decide to drink or dine out

More than 130 delegates attended the event at One Moorgate Place in London

Matt Jaggar, marketing manager of The Coaching Inn Group, outlines a case study

Helen Baptist, senior VP of Fishbowl, reveals what we can learn from the US market



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Advertising Feature

Cyber security in restaurants Restaurants are becoming more vulnerable to cyber attack as a result of embracing the new technologies demanded by consumers. The fact that restaurant companies process millions of credit card transactions increases susceptibility, as does the increase in third parties becoming involved in handling of data.

US food chain Wendy’s was hit by a massive cyber attack in 2016. At least 1,025 of its restaurants were targeted with debit and credit card information stolen as a result of malware having been installed on point-of-sale systems in the affected locations. In similar incidents, US restaurant chain Cicis suffered a data breach around the same time, and in early 2017 the Zaxby’s chain notified authorities of a computer system and point-of-sale breach that affected 108 locations across the States following fraudulent credit card activity traced back to several of its sites.

The risks


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There is an increasing trend for infiltrating point of sale systems with malware (malicious software) designed to steal payment card details, used to create cloned payment cards to carry out fraud. Cloud based technology increases risk of unauthorised access and raises questions over where the data is stored and who owns it.

As more restaurants become franchisee-operated, risks can increase unless franchisees work under strict parameters and standards when it comes to deployment of technology.


As an industry reliant generally on lower cost labour, high staff turnover can result in any security protocols not being followed.

Action points


Consider access to data by employees and franchisees, as well as supply chain partners and other third parties, and how this is monitored and managed. The parties involved in the supply chain need to understand where responsibility for preventing and dealing with cyber risk lies – is this covered by a suitable contract?


Any organisation processing personal data must take appropriate technical and organisational measures to protect that date from a data security breach.


Put in place a cyber risk management policy and ensure that this is part of the company’s governance framework. Conduct a regular risk assessment and act where vulnerabilities are highlighted.


Define roles and responsibilities of staff when it comes to data and IT security and implement staff training and awareness on all relevant policies and procedures.

Security gaps can appear as customers use apps to check table availability and make reservations via a mobile device. Loyalty programmes are now being integrated with reservation systems to capture sensitive customer data, putting even greater onus on operators to protect data.


The demand for new services, such as food delivery from restaurants, opens up a wealth of customer data, including payment information, to third party delivery providers. It can be difficult to control who has access to this data, as it is possible these third parties may be sharing sensitive data with other parties, or not storing it securely themselves.


Other innovations, like self service technologies allowing customers to place orders in restaurants and pay without the intervention by staff, may be managed by outsourced providers. Again, they are capturing data about customers, including information such as dining preferences, but also sensitive card data taken during payment.




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Feature The Jolly Butchers

More Booma than bust London Village Inns owner Martin Harley talks to Glynn Davis about his Indian food and craft beer concept Booma and his mission to make all six of his pubs free-of-tie by taking the MRO option


ondon Village Inns’ latest move is to offer customers onion bhajis paired with Delerium Tremens, Chettinaad lamb chops with Rodenbach Grand Cru, tandoori machhi with Camden Town Gentleman’s Wit, and chocolate mousse with Pin-Up Milk Stout. As the company’s name suggests it operates pubs and this is largely correct apart from the fact its founder, Martin Harley, recently fancied a bit of experimentation. He decided to open Booma restaurant in Brixton, south London, as a way to explore his theory that Indian food and high-quality beers are a glorious marriage. Harley says: “I have always wanted to offer food and craft beer and to flip the gastro-pub concept on its head. They always inserted food into the pub, whereas we’ve done a restaurant with good beer. I think the spices of Indian food go so well with various styles of beer – there are some great combinations.” Last summer, Harley decided to run with the idea and approached the Chinese takeaway next to his Crown & Anchor pub in Brixton. He says: “We thought it would be a fantastic idea to do something with that unit and, when we spoke with the owner, we found out he was knackered and had been looking to get out.” Harley is well aware of the risks involved when opening an experimental venture, especially as he freely admits customers have to treat Booma very differently to a regular Indian restaurant. He says: “We recommend they have a pairing tasting menu so they can try the different beers and food and experiment a bit. People who go there really like it but they do have to embrace the concept.” This is certainly a big diversion for the business. Typically his pubs do only 25% food and, if the beer drops below 75% of sales, Harley says his first thought is: “We’re not selling enough beer!” He also acknowledges if anybody had suggested he open a restaurant, he would have said they were “bonkers”. He adds: “It is

a tough game and without the beer element I’d not be doing it. I’m a pub person and I’m using my skills of pairing beer with food.” This seems to encapsulate his philosophy – being unafraid to take risks, getting into things ahead of the curve, having them based on certain solid foundations, and securing a decent deal on the property. This combination of characteristics was certainly evident in 2010, when he took on the Jolly Butchers pub in Stoke Newington, north London, which, Harley says, was known locally as the “flying bottle”. He adds: “It was very run-down and losing money when I was approached to take it on. It was a scary proposition. I knew the pub too well and didn’t want to spend much time in it after we’d agreed to do the deal to avoid depressing myself. We were going to reinvent it and would end up keeping none of the existing customers so I spent maybe ten minutes in there before we closed it for eight weeks to strip it back to its bare bones.”

“I have always wanted to offer food and craft beer and to flip the gastro-pub concept on its head” What appealed most to Harley was the freehouse status. He says: “This was the exciting part, being able to pick the world’s best beers. I’d worked at Belgo in the 1990s and we had lots of fun sourcing Belgian and other overseas beers. This was in the early days of the craft beer movement and a lot has happened since, but at the time we opened the pub it was a random mix of people just wandering in. The old-school drinkers were mortified but there was a great feel about the place and it took only a week to get very busy with customers from all over visiting us for the beers.” ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY



Brownswood Tavern Being free-of-tie was particularly important for Harley because his first two pubs were, and remain, tied. The Rose & Crown, also in Stoke Newington, was a lease from Scottish & Newcastle, while the Wrestlers in Highgate is a leasehold from Punch. From taking on the lease at the Wrestlers in 1997, Harley had always worked hard at offering as varied a mix of beers as possible within the limitations imposed by the tie. He had also got his hands dirty cleaning up this boozer, which was heading into oblivion. He says: “It had been taken down the pan with screens, fruit machines and pool tables. We had no money to invest in it so we just slugged it out with lots of smiling. There was no formula – I was only 26 and I’d not worked things out. We were just very customer-focused and it took 18 months to turn it around.” Things ticked along for 12 years while he learned his craft, at which point Harley took on the Rose & Crown from his parents, who had owned the lease since 1986, when they decided to move abroad. Again the focus was on the basics – “friendly staff, not too-cool-for-school, who would say ‘hello’ and ‘goodbye’ in the proper way of a bartender”. At this stage he says he was simply running two “good, upmarket community locals”. That ended with the Jolly Butchers, which rocked the boat and pushed Harley forward as a craft beer pioneer and owner of a cool destination bar. This move seemed to kick him into action and no doubt gave him with plenty of confidence. Enough to take on the hulking Brownswood Tavern in June 2011, which rather surprisingly threw him back into the land of the tied pub.

“[Restaurants are] a tough game and without the beer element I’d not be doing it. I’m a pub person and I’m using my skills of pairing beer with food”

Harley’s five beers that changed the drinking landscape (former Jolly Butchers mainstays): Thornbridge Jaipur Dark Star American Pale Ale Oakham Green Devil IPA BrewDog Punk IPA Camden – Town Hells Lager


The Rose & Crown


Despite this downside, Harley could see the upside. He says: “I had known it for years and knew it was a challenge but there was great potential. It’s a big pub with a large garden. I thought we could put in as many interesting beers as Ei Group would allow and also some good food to appeal to the young professionals of Stoke Newington.” An even bigger challenge came in April 2012 when Harley, along with other investors, took on the freehold of the Rose & Crown in Brixton. He says: “It was a different part of London for me and it required lots of hard work. We had squatters in for the first six months and then we had to put a new roof on. It was all about it being at the right price because it was not in the most salubrious area and it was doing no business.” The key point, again, was it being free-of-tie and Harley had the intention of making it “Jolly Butchers’ little sister south of the river”. At this point you would think Harley’s future would be free houses all the way but he then surprisingly took on a Punch lease at The Westbury, near Wood Green in north London, in late 2014 because, again, he could see the opportunity. Although proud of the pub, he adds: “We knew we were early into the area but maybe we were too early. The locals love it but there are just not enough of them yet. It’s making money but, for the quality of the pub, it should be busier. However, it is going in the right direction, it’s near a tube, and there are lots of chimney pots.” His objective over the next two years is to have all his six pubs free-of-tie by taking the Market Rent Only option when it becomes available. Any new pubs he takes on will be free-of-tie, he promises. He adds: “We’re not interested any more in pubs that are tied. To date, we’ve been successful with the tie as we’ve utilised what we could get and worked hard at it. We’ve also pushed the pubcos to do more good beers – but any new pubs will be free-of-tie.” He also has the Booma concept, which is still finding its feet and will no doubt be given all the time it requires because Harley is proud of the fact he has never had to close a pub or surrender a lease in his 20 years of operating. It might take time, but it’s more likely to be Booma than bust for London Village Inns.

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A lot more high-brow than porridge


uring the past 18 months, I have eaten two fantastic meals in prison. No, I wasn’t there to pay my dues to society, my mother was working in the education department of HMP High Down, a category B prison in Surrey, and we met for lunch at The Clink, a restaurant open to the public and run solely by prisoners under the instruction of professional trainers. The space itself is reminiscent of a 1990s Chinese restaurant – glass tables, spotlights and plastic knives and forks. We were welcomed warmly by the maitre’d, one of many prisoners involved in this social enterprise, and shown to our table. Our first conversation, with the “sommelier” seemed a trifle odd – ah yes, no booze. The Clink isn’t allowed to serve alcohol but, nevertheless, the prisoners are still learning service skills and took us through a soft drinks menu with great knowledge and personal

Katy Moses shares her experiences at The Clink restaurant at HMP High Down in Surrey and interviews the charity’s chief executive Chris Moore

recommendations. The menu was fantastic – varied, seasonal and interesting – and no small challenge for the chefs either. Starters included asparagus with soft-boiled quail eggs, and potted brown shrimps with paprika croutons, chicory salad and lemon dressing. Mains were equally wholesome and exciting including poached and roasted chicken with puy lentils, salsify, glazed carrots and thyme jus; and duo of venison, seared loin and cottage pie with cavello nero and light pan juice. Food is seasonal, sustainable and local, with much grown in The Clink’s own garden, which is also staffed by prisoners, and cooked fresh on the day. I know what you’re thinking – what about the knives? The bustling, open kitchen is well supervised but, more to the point, the prisoners on this programme are thrilled to be part of it – this could be their stepping stone to a career outside. Other than the slightly dated decor and lack of white wine, I would hold The Clink up favourably to some supposedly high-end London restaurants I have eaten in since. Unfortunately, six months after my first lunch with my mother at The Clink she passed away after a short illness, making my second visit a more sombre affair. We were invited by her manager to visit my mother’s teaching room, receive letters from her pupils and lunch with her colleagues. Once again I was impressed by the quality of service, food and knowledge the prisoners displayed. The waiters knew what was in each dish and could soft drink-match, ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY




reduction in the likelihood of those participating in The Clink programme reoffending

The Clink restaurant at HMP High Down in Surrey the chefs showed passion for their kitchen and produce, and the other prisoners we met were a credit to the hospitality industry. Following my last visit, I spoke to The Clink chief executive Chris Moore to understand more about the success story so far and plans for the future.

On completion of their training, The Clink’s support workers mentor prisoners to help them find employment opportunities and, on release, meet them at the gate and help them back into society, securing accommodation and opening a bank account. Once a job has been secured, the mentor will visit the graduate at their place of work on a weekly basis for six to 12 months to ensure their continued commitment to rehabilitation.

Where did the idea for The Clink come from? The first Clink Restaurant opened in 2009 at HMP High Down, when Alberto Crisci, then a catering manager, identified the need for formal training, qualifications and support for prisoners in finding a job after release. The issue of reoffending has become one of the most pressing challenges facing society today and the need for formal training and support for prisoners is reinforced by figures recorded in the 2015 and 2016 Bromley Briefings, prison factfiles produced by the Prison Reform Trust. The reports found only 53% of the prison population has any qualifications and 46% are reconvicted within one year of release, reinforcing the need for rehabilitation initiatives such as The Clink.

How do you choose which prisoners are able to participate in the programme and what happens when they leave?

As well as cooking and waiting roles, are there “back office” positions to train in?

“The issue of reoffending has become one of the most pressing challenges facing society today”

Each of The Clink Charity’s restaurants uses the Five Step Programme – recruit, train, support, employ, mentor. Prisoners volunteer to be trained in response to The Clink promoting its award-winning training programme in the prison job shop and the prison newspaper, Inside Times. Prisoners with between six and 18 months of their sentence remaining are eligible to apply. Agreed criteria for recruitment includes good behaviour, a basic level of education, motivation to train and gain qualifications, and experience in a restaurant environment, as well as prison criteria such as security clearance.



The Clink Restaurants at HMP High Down, Cardiff, Styal and Brixton give prisoners reallife experience of working in a fully operational kitchen while working towards their accredited NVQ City & Guilds level 2 qualifications in food preparation and food service. Each of the four restaurants employs up to 30 prisoners at a time but also provides additional opportunities for other Clink projects such as Clink Gardens and Clink Events. The Clink Gardens provide prisoners with the opportunity to achieve City & Guilds NVQ level 2 qualifications in horticulture. The fruit, vegetables and herbs produced are delivered to the restaurants along with eggs from chickens the prisoners are also responsible for. The Clink also has an external catering service, Clink Events, with food prepared by prisoners in the restaurant kitchens, giving them the opportunity to create canapes and sophisticated bowl food, widening the trainee chefs’ education and experience even further. Clink Events has established a collaborative partnership with Centrepoint, the UK’s leading young homeless charity, to help young, disadvantaged people get their foot on the career ladder. Candidates from Centrepoint undergo 50 hours of training in ten weeks towards a level 1 NVQ in hospitality. On completion, Clink mentors


place the graduates in employment and support them. This way it can help stop people going to prison in the first place.

skills. Some prisoners have endured incredibly hard lives before and during prison and generally tend to lack key social skills, which may impact on their ability to find work on being released. The team works hard to turn this around and provides continuous support, motivation and guidance alongside the day-to-day education and training to expose prisoners to the best opportunities available to them on their release.

What figures can you share with us? A recent Justice Data Lab report has praised The Clink Charity for its “statistically significant result” in reducing prisoner reoffending. The report looked at male ex-offenders who have trained for between six and 18 months at The Clink Restaurants at HMP High Down, HMP Brixton and HMP Cardiff. To show a fair assessment, Clink graduates who qualified for analysis were compared with individuals who had not received The Clink’s intervention but were in similar circumstances. The results found for every 100 people participating in The Clink’s training scheme, 17 would reoffend within a year of release whereas, for every 100 non-participants in a group of similar people, 29 would reoffend within a year. This indicates for The Clink Charity there has been a 41% reduction in the likelihood of reoffending for those participating in the programme.

What challenges do you face? Employment is one of the key issues affecting the reduction of reoffending. There can be a stigma around employing someone who has been to prison, despite the fact it is estimated one-fifth of the working population has committed an offence. The Clink team works hard to build relationships with employers to provide vital long-term support to the graduates throughout their career. This support network has helped employers feel confident in employing our graduates. Before getting to the employment stage, however, there are many challenges The Clink must work through to get the prisoners ready for work on their release. The most common challenge is successfully building confidence, and improving communication and team-working

“On completion of their training, The Clink’s support workers mentor prisoners to help them find employment opportunities and, on release, meet them at the gate and help them back into society”

What support from government, individuals and trade would take The Clink to the next level? As a not-for-profit organisation, The Clink charity relies on the ongoing support and generosity of the hospitality industry and general public to support its commitments towards rehabilitation. The Clink’s mission is to have 20 training facilities in operation by the end of 2020, from which The Clink will see more than 1,000 highly trained and qualified graduates released into society. To achieve this, The Clink relies on raising funds via restaurant sales, donations and alternative methods such as retail sales, reinforcing the importance of increasing the charity’s exposure. It can produce about 50 graduates a year per training unit. To change more lives, it requires more Clink projects. To do this the Clink Charity needs to raise £8m and it continues to rely on generous donations from grant-making trusts, the general public and businesses. The Clink is, indeed, an inspirational social enterprise. My personal experience of the food, service and excellent knowledge of all involved was fantastic. If ou’re looking for somewhere a little different for your next team lunch, I can highly recommend it. Just don’t ask for the wine list.

Katy Moses is founder of KAM Media, a research-based consultancy specialising in pubs, bars and restaurants ¡ SPRING 2016 ¡ PROPEL QUARTERLY


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East meets west

Development, growth and brand strategist James Hacon begins his series of articles on Hong Kong by looking at multi-site licensed retailers in the city that are operating successfully in other parts of the world


ong Kong is a true global powerhouse, long considered the gateway between east and west. Even with the hyper-growth of major cities Beijing and Shanghai, the city remains vital to the Chinese government, which benefits greatly from its unique status – a territory fully immersed in the global economy and sealed off from the mainland yet closely controlled by the Communist Party in Beijing. News reports suggest Hong Kong is home to 60,000-plus restaurants, a claim that is impressive yet hard to prove given the culture of small street-corner eateries. Yet walking the winding, bustling streets, it certainly seems plausible. This is the city that pips London to sixth spot in the global ranking of Michelin stars, boasting 87 stars in total to London’s 79, with four more three-star restaurants too. It’s not just the high end that’s succeeding

Tim Ho Wan

either. Research conducted in 2015 by Nielsen revealed Hong Kong residents are the most likely in the world to eat away from home at least once a day. When considering what great value dining out can be in the city, you can see why. I paid less than £10 for dining at two different Michelin-starred restaurants, well worth the two-hour queues.

“I paid less than £10 for dining at two different Michelin-starred restaurants, well worth the two-hour queues”

Starbucks, Hong Kong

Coffee competes with Whitbread-owned Costa Coffee and Starbucks, which made its debut in the city in 2000 and has grown to 137 sites in the territory, operated by Coffee Concept. Despite the shared history with the UK of more than 150 years and significant cultural synergies, few British restaurant brands seem to have made the journey to Hong Kong. Of the few brands to succeed, many are in the guise of celebrity chefs. Jason Atherton is perhaps the best example, with three restaurants in the city in collaboration with JIA Group and its founder – Asian-based ▲ British-born concept Gaucho in Hong Kong

As you might imagine, established international fine-dining brands such as Nobu, Caprice and Zuma are well represented, mostly through tie-ups with international hotel brands. Fast food is present but interestingly less prevalent than you might think, with traditional Cantonese street restaurants and stalls being the preferred choice for a quick bite. Speak to locals and you’re told western cafe culture is on the rise, which may be a surprise in a destination that traditionally served green tea before water when eating out. Coffee is making more of an appearance on menus generally, while independent coffee shops are springing up across the city. Local brand Pacific ¡ SPRING 2017 ¡ PROPEL QUARTERLY


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Insight Hutong at the Shard

Mott 32

hotelier and restaurateur Yenn Wong. The first two of Atherton’s concepts to launch were 22 Ships and Ham & Sherry – both tapas-style outlets – while Aberdeen Street Social takes the same shape as his Social Company outlets in London, offering modern British cuisine. Walking along busy Queen’s Road in Hong Kong’s crowded commercial centre, I was surprised to spot a lone sign pointing the way to another Britishborn concept, Gaucho. After a successful overseas launch in Dubai followed by an audacious move to take the concept to Buenos Aires, Hong Kong was the third international location for the brand, which launched on the fifth floor of the LHT Tower in 2014. Moving to home-grown concepts one deserves mention before all others – Tim Ho Wan, renowned for being the world’s least expensive Michelin-starred restaurant. The brand serves traditional and contemporary dim sum, with an extremely casual service style. Founded in 2009 by Mak Kwai-pui, a former three Michelin-starred chef, the concept started with one outlet and made headlines with the owner’s outspoken views on the Michelin Guide, branding it “elitist” and


“out of touch with local tastes”. It has since grown to 35 outlets in ten countries. Trading formats and conditions differ between sites. For example, two venues have been awarded a Michelin star, one operates as a “hole in the wall” and the Singapore site trades 24 hours because of its popularity. Bar Pacific is a 32-strong chain of neighbourhood bar venues in Hong Kong. Bucking the trend of the other groups I researched and visited, the group moved its attention from the trendy city centre locations of its competitors and operates pubs more likely to be found tucked next to a convenience store or launderette. It gained international attention recently, however, when its initial public offering on Hong Kong’s Growth Enterprise Market soared 1,600% on its debut – the largest opening day by a pub or restaurant group anywhere in the world. The HK$45.2m (£4.7m) funds raised will be invested in upgrading and expanding the estate.

Maximal Concepts is one of the most highly-awarded multi-brand operators, with 18 restaurants in the city. The fiveyear-old business was founded and led by three partners, Malcolm Wood, Quan Mu and Matt Reid. The first concept to be rolled out internationally is Mott 32, named after the first Chinese convenience store in New York City, offering “tweaked” traditional Cantonese cuisine. It hopes to roll out to Dubai and Bangkok this year and recently opened at the Trump International Vancouver, which caused a flurry of negativity by food bloggers attending the opening following its owner’s latest political gaffe. Perhaps not the best brand partnership in the current political environment but, who knows, it could become a real hot spot for Russians visiting the city?

“Bar Pacific gained international attention when its IPO on Hong Kong’s Growth Enterprise Market soared 1,600% on its debut – the largest opening day by a pub or restaurant group anywhere in the world” The final Hong Kong-founded company worth featuring is Aqua Restaurant Group. Launched in 2000 by former lawyer David Yeo, the aim was to import the buzz of the New York and London restaurant scenes to Hong Kong. Since then, the group has developed to incorporate 20 outlets in Hong Kong, Beijing and London. Despite developing its portfolio to include Chinese cuisine, it was not until recently the company forayed into Hong Kong’s local cuisine by launching the Dim Sum Library in Admiralty’s Pacific Place last month, a chic and contemporary concept offering small plates. In London, Hutong at the Shard has received a great many accolades and awards since its launch in 2013. So, while I’m sure the article has inspired you to jet off to Hong Kong, for the time being you can always head to London to enjoy a little taste of China and this restaurateur’s flair.

Dim Sum Library

James Hacon is a development, growth and brand strategist for restaurant and hospitality companies, working as brand strategy director at Thai Leisure Group and a select group of other clients


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British bulldog – our foodservice industry proves its resilience


Cyril Lavenant, NPD Group’s director of foodservice UK, looks at how the industry stood firm during a challenging 2016 and picks out the keys to success for the year ahead

he foodservice industry faced a range of challenges in 2016, including slower GDP growth, which has affected consumer confidence, a higher National Living Wage, and concerns over Brexit. However, the industry has proved resilient as it managed to grow for the third consecutive year. In the year ending November 2016, total foodservice visits in Great Britain rose by 1.1% versus the same 12-month period the year before, reaching a total of 11.3 billion. Total spend amounted to nearly £53.5bn, up 2.9% compared with the previous year. The increase in total spend is linked to a strong rise in the price per item, at 3.1%, directly impacting the number of items we consume (-0.8%). This is a distinct change as consumers had been ordering more items not fewer during the previous two years. Higher wages, concerns over Brexit and the weakness of sterling have clearly had an impact on price. Prices are likely to keep increasing in 2017 because of inflation, which is expected to be about 3%. For the first time in several years, British foodservice is not the fastestgrowing market in western Europe. Last year, Spain was the fastest-growing country at 1.4%. Britain was second at 1.1%, followed by Germany at 0.7%, France at 0.4% and Italy at 0.1%.

Plenty of growth – but London is slowing Once again market growth has been national, with most of Britain’s regions enjoying growth in visits. However,

London is no longer leading the way. On the contrary, it registered the slowest growth (0.7%). The London market is quite saturated and now the major restaurant chains are expanding outside the M25. When looking at dayparts, it is interesting to note only breakfast and lunch are growing, while dinner and snacking lost almost 1% of their visits. Breakfast continues to thrive but this daypart probably needs to be reinvigorated in 2017 to continue to succeed.

“London is no longer leading the way. On the contrary, it registered the slowest growth (0.7%). The London market is quite saturated and now the major restaurant chains are expanding outside the M25” Lunch is benefiting from the improvement operators have brought to the occasion and to the fact it has a lower average ticket than dinner. Dinner was on a positive trend until Brexit, then it started to drop driven by the defensive posture consumers have adopted when it comes to spending money in uncertain times. The same analysis applies to social classes. In the first half of 2016, ABC1s and C2DEs were both eating out more than in 2015 but, as the year began to close, C2DEs had reduced their eating-

2016 at a glance Foodservice in Great Britain grew visits by +1.1%, a third consecutive year of growth. Total spend rose by +2.9%, up to £53bn Brexit is already weakening the industry Leveraging on the delivery trend is key to success Local sourcing and healthy menu options are indispensable

out and drinking-out occasions. Another demographic insight is that, following Brexit, adults have cut their eating-out occasions with children but adult-only eating out has increased.

Winning and losing channels The top-three winning channels in 2016 were quick-service pizza/Italian (4.3%), full-service chicken (4.1%) and quickservice burger (4%). Pizzas and burgers clearly continue to be British favourites. Full-service pizza/Italian, in-store cafes/ restaurants, quick-service bakery and quick-service coffee also had a strong year. At the opposite of the spectrum, canteens (in both the workplace category and education) continued to lose visits strongly (-2.9% and -1.7% ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Insight respectively) as they are not managing to compete with the growing appeal of the high street. The vending machines category was also slightly down. The casual dining sector has bounced back into strong growth (5.2%) but this performance is because of the expansion of casual dining outside the saturated London market, where the sector is in decline after years of strong performance. Casual dining restaurants must work hard in 2017 to regain the momentum in London, a market where consumers have access to an extraordinary choice of food. The good performance of the foodservice market continues to be driven by chains, which have increased visits by 3.5%, while independents are still losing ground with visits decreasing 1.9%. Some independents do a great job at continually renewing their offer to ensure they appeal to consumers and retain their loyalty but the vast majority are simply not doing enough to address the expectations of increasingly demanding consumers.

Top five countries for foodservice market growth in 2016

Brexit has weakened the industry The fear and uncertainty among Britons that has followed the Brexit referendum has had one important and immediate effect – it has changed our confidence in the future from slightly positive to negative. And we know all too well how a consumer who is not confident about the economy, job security or financial resources will be more cautious when it comes to eating and drinking away from home.

“Operators that source locally will benefit from consumer approval of local provenance and support for British farmers” Because of this fall in consumer confidence, the market has started to slow. From July to November 2016, the foodservice market has only managed to increase its number of visits by 0.4% versus the same months in 2015. This is a big contrast to the visit growth of 1.5% recorded between January and June. What can we expect in 2017? Inflation will build and the market will continue to see only slow growth. The importance of meal deals and promotions will increase and the lower-income demographic will cut down on visits more than the higherincome demographic. Meanwhile, the number of items consumed during each visit will decline, and snacking dayparts will struggle.


Keys to success in 2017 Consumers have clearly cut down their eating-out occasions since the Brexit referendum but will the British foodservice industry fall into recession? No, this is unlikely because the industry seems strong enough to avoid the fate of 2008. Currently, chains account for 56% of the market, up from 44% just eight years ago. The well-known chains have deeper pockets, enough to weather a period of poor trade. But they also have more funds to invest into understanding what consumers are expecting when eating and drinking out and to make further investments to satisfy consumer needs and expectations. Whether you are an independent or part of a chain, there are some clear market trends you can tap into to help build success in 2017 and beyond.

Respond to the delivery revolution As consumers, we are used to having everything at our fingertips and that’s why we increasingly shop online, whether for food, toys, sports – you name it. Delivery is not new in foodservice but it is growing very quickly thanks to an aggressive push by aggregators and non-food providers. With consumers enjoying greater choice than ever, operators are finding it increasingly difficult to maintain customer loyalty. How do they respond? They need to

develop a flexible business approach. This could mean introducing a delivery service or partnering with the most relevant delivery aggregator.

Deliver an increasingly high experience The foodservice industry is facing a storm of cost increases from the National Living Wage, inflation, weaker sterling and growing business rents. At the same time, consumers remain cautious about how they spend their money. Operators will have to focus on maintaining the quality of their food and drink offerings and retain menu diversity while delivering an ever-better customer experience. This will help operators engage with customers and drive loyalty and repeat visits.

Find local food suppliers but don’t sacrifice quality Consumers are increasingly looking for good-quality food – they don’t accept low quality. The weakness of sterling, inflation and the impact of the National Living Wage will force operators to find local suppliers capable of providing high-quality products on a commercial scale. As the number of local farmers and growers who can provide high-quality meat and ingredients is limited, creating a strong bond with them will also be key for operators. Operators that source locally will benefit from consumer approval of local provenance and support for British farmers. ▲



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56% of the UK foodservice market accounted for by chains, up from 44% in 2008

Cater for ‘healthy choice’ and ethical consumers For many consumers the availability of a “healthy choice” is a reassuring sign of quality. Having relevant healthy options will also help operators cater for consumers’ constantly-changing health expectations. Consumers might be

vegan or vegetarian, some want glutenfree food while others are looking for low-fat or low-calorie options. This all results in increasingly complex menu and product sourcing – but there’s no alternative. Operators that understand consumer sensitivity to sourcing, waste and environmental protection will find it easier to succeed.

Top ten growing channels – % visit growth YE Nov 16 vs 15 0.0% Quick-service pizza/Italian Full-service chicken Quick-service burger Full-service pizza/Italian In-store restaurant Quick-service bakery Quick-service coffee Quick-service ethnic Quick-service chicken Full-service ethnic

50 50






Offer a new twist on a classic Consumers love seeing a wide variety of food and drink on a restaurant menu, and many operators have successfully catered for this need. Yet consumers are also creatures of habit who – when it comes down to choosing something from a menu – will often be happiest enjoying a classic or traditional dish. If done well, a new take on a classic dish will wow the customer and keep the menu fresh. Operators need to offer the reassurance of the traditional dish while adding a surprising twist that wins the customer’s heart.

“Operators that understand consumer sensitivity to sourcing, waste and environmental protection will find it easier to succeed” Look at these five keys to success and you’ll see two common themes. Foodservice operators are continually increasing the quality and diversity of the food and drink they offer consumers – and they do this to make consumers feel better when they spend money on eating out.

Cyril Lavenant is director of foodservice for the UK at NPD Group



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When undertaking a third-party delivery service operators must ensure it enhances their brand rather than puts it at risk, says HGEM managing director Steven Pike


Delivering the brand

great guest experience is built around a strong brand. of teamwork apply. The delivery driver may not have been As the core of your operation, it guides the way each trained to each operation’s brand standards, can’t discuss the venue is run. So, how easily should you hand it over menu and is unlikely to have an inclination to offer additional to a third party? conversation or build a rapport with customers. But what if they Food delivery offers the consumer convenience, choice and were and you agreed some simple actions that could help the precious time. Companies such as Deliveroo, Uber and Amazon delivery person protect or reinforce your brand? The food might are extending a service to restaurants with seemingly little be delivered to a customer who has not previously interacted disruption to existing operations. The service offers operators with the restaurant they have ordered from. Imagine the a chance to increase their competitive advantage, with delivery driver arrives at the door, they’re late, in a no extra staff required and a possible improved rush and they come across as a little rude. Who return on investment. does that impression sit with? Is the customer “Is the customer However, it comes with risks. Handing likely to associate the interaction with the likely to associate a significant part of the guest journey to delivery company or the brand that’s now the interaction with the a third party limits the degree of control sat in their kitchen? The truth is probably a delivery company or the you and your team have over the quality bit of both. Third-party companies could be brand that’s now sat in of the experience. This is not necessarily a creating a guest’s first impression of your their kitchen? The bad thing but it is as important to measure brand on your behalf – it should be positive if these experiences as it is those that happen truth is probably the team are taking steps to manage it rather on-site. It is also important to use the resulting than considering it out of their remit. Perhaps, if a bit of both” insights to tweak aspects you have control over appropriate, there could even be a short, smiley and to work with your delivery partner for those note from the person who prepared the order? you don’t. Process When evaluating a delivery experience, we start from the Using a delivery company offers an additional stream of revenue same place as other experiences – with an understanding of but increased orders can put a strain on the restaurants and the the brand promises and a guest experience management service offered to eat-in guests. As the kitchen works harder to framework to define the expectations we are going to measure. complete the extra orders, guests may be left waiting longer This breaks down into four main areas – people, process, for their food. Then there are the drivers, frequently wandering product, and perception. in and out of the restaurant in their conspicuous uniforms and large bags or hanging around at the bar or kitchen. Eat-in guests People might get the impression they are still waiting for their food due People are at the heart of any hospitality experience, helping to these additional orders, even if that isn’t the case. It’s a good the guest to feel welcome and looked after at each stage of the idea to channel the drivers away from guests, creating a different journey. Delivery has fewer touchpoints but the same principles ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Opinion collection process and perhaps a dedicated team member to coordinate collections. Empowering your staff with the knowledge to answer questions about delivery will also help to reassure guests – and may even encourage guests to try it. Getting the timings right can be critical to the success of a delivery operation – team members need a clear view of the pipeline and ability to flex what they are doing according to demand to maintain optimum productivity. Ownership of the process should be absolutely clear so orders are not disrupted through ambiguity.

“Empowering your staff with the knowledge to answer questions about delivery will also help to reassure guests – and may even encourage guests to try it” Product With a delivery experience there are fewer interactions with people so your product is going to be centre stage. The nature of delivery means you will be unable to present food and drink in the same way as you would in a restaurant. Transportation in a box on a rider’s back is bound to have an impact. Much of the solution lies in what packaging you use and how you design the product for delivery. But you will also be reliant on team members following specifications correctly and recognising where a given order is at risk of having its appearance damaged or losing temperature too quickly. Consider what steps you can take to ensure consistency and how you can be alerted to weaknesses.

Perception This segment is where it all comes together. If the people interactions have been personable, the process has been efficient and the product has been delivered with the expected level of quality, word of mouth is likely to be satisfactory. But is that good enough if other operators are achieving the same goal? This is often the area that needs a bit more creative thinking if we are to actually influence perception rather than just observe it.

“Use any metrics the supplier can collect for you but don’t rely exclusively on these if you want an intelligence advantage over your competitors” What can you do, either at brand level or in terms of encouraging individual actions, to become and remain frontof-mind for customers? The answers may lie in the way delivery services are promoted, either on-site or online. Or the little things that make the difference between an experience that is fully satisfactory and one that is memorable for the right reasons. And of course you need to actively avoid being front-of-mind for the wrong reasons. Without measuring these things it becomes


hard to recognise and respond to issues or opportunities or to track how you are perceived relative to your competitors.

Evolution of the industry The experience is likely to evolve significantly during the next few years. Expectations will shift from having your favourite meals delivered to you to a defined industry with its own norms and expectations, many of which will exhibit a looser connection to the restaurant experience. This will particularly impact the “Process” area discussed previously. We are likely to see purpose-designed industrial kitchens (consider the impact Amazon has had on shops). These may offer different opportunities for attracting aspiring chefs. The “Product” will also change as new ways are found to package and manage the quality of meals while enhancing the brand. In suitable areas, bikes might give way to drones, perhaps eliminating the last remaining point of personal contact. Delivery companies will build up huge data maps and identify patterns about consumer demand including correlation with weather, days, distance to and from payday, and types of food ordered in certain circumstances. Data could be integrated with restaurant data to make kitchens more efficient or to identify areas good for expansion.

Conclusion If you are one of the many brands exploring how best to exploit the opportunities offered by delivery companies, make sure you treat it as part of your own brand promise. Define what you expect the customer to experience and agree this with internal teams and your delivery supplier – then measure these expectations. Use any metrics the supplier can collect for you but don’t rely exclusively on these if you want an intelligence advantage over your competitors. A mystery customer can walk through the process and collect qualitative evidence that could add richness to statistical data and inform actions and decisions about improving perceptions. The use of bite-size learning, particularly in video format, can help teams recognise what is expected and how to manage consistency. Consider how they might feed back into the process and help you to recognise when it may be better to do things in a different way. A traditionally offline market is going online, make sure this enhances your brand rather than putting it at risk.

Steven Pike is managing director of HGEM The UK’s leading expert in guest experience management (GEM), which provides operators with tools for intelligence gathering, guest engagement and staff learning. The company works closely with operators to help generate revenue growth through effective GEM. Its services include mystery guest visits, online feedback, social advocacy, performance analysis and learning management. Clients include Wagamama, Brasserie Blanc, Spirit Pub Company, Malmaison and Peach Pubs. For more information, visit


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Feature Knife & Cleaver

Reclaiming the title J

Managing director Andrew Coath and chef director Mark Austin tell John Porter that Epic Pubs is ready to revitalise the gastro-pub genre

ust what marks the key distinction between a pub and a restaurant has occupied the industry since the pioneering gastro-pubs first set up shop. With the term so widely used some might question its usefulness these days. However Andrew Coath, managing director of Epic Pubs, would like to reclaim the gastro-pub descriptor. He says: “These are very different times to a decade ago, when gastro-pubs were still seen as new and vibrant. People sometimes say the gastro-pub is dying and high-street brands are taking over – but I definitely don’t believe that.” Epic has a 70/30 split in favour of food across the business, which Coath recognises pushes the limit of the restaurant/pub divide. However, his track record demonstrates he is up to the challenge of delivering high standards of service and quality in a relaxed pub environment.

Flexibility Epic Pubs set up shop in mid-2015, with Coath joined by Acorn Award winner Jonathan Taylor as group operations director and Mark Austin as chef director, both also formerly with Peach, as well as travel and tourism specialist Wendy Twiddy as central services director. Coath says: “I had an amazing time with Peach, and now it’s my time to do this.” One key benefit he emphasises is the business has flexibility in identifying sites. Epic Pubs is focused on freehold properties, while sister company Heroic Pubs acquires leaseholds. These operate under an Enterprise Investment Scheme overseen by Rockpool Investments, which specialises in managing private investment funds. ▲

“People sometimes say the gastro-pub is dying and highstreet brands are taking over – but I definitely don’t believe that” With a background in five-star hospitality, including stints with the De Vere Grand Hotel in Brighton, the Swallow Royal Hotel in Bristol and the pioneering boutique Malmaison, Coath joined the then-nascent Peach Pubs business in 2005. Working within the joint venture Peach Partner model, he began with The Swan at Salford, near Milton Keynes, later adding pubs in Woburn and Bedford. In the process, Coath was named The British Institute of Innkeepers’ licensee of the year in 2007, and also holds a commendation from The Queen for his contribution to hospitality. ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Feature A third arm, Unique Hospitality Management, is operationally responsible for the leasehold sites – The Anchor at Aspley Guise, near Milton Keynes, and The Knife & Cleaver in Houghton Conquest, Bedfordshire, are both leased from Charles Wells, while Mill Street Pub & Kitchen in Oakham, Rutland, is leased from Punch. The other pubs in the Epic estate are its original site, The Golden Ball in Maidenhead, Berkshire, and 185 Watling Street in Towcester, Northamptonshire, both freehold. This flexibility within the Epic approach has seen the business grow to five sites relatively quickly. Coath says: “I love pubs. I love the informal casual element and the fun we can have. The biggest challenge is finding the right pubs, and that has become more of a challenge over the past ten years. That’s where our flexibility gives us an advantage.” Epic also works with industry veteran Steve Thomas, who through his established relationships with a range of pub companies is able to open up additional expansion opportunities.

“There are a limited number of opportunities with the pubcos for the type of site we want so we’re also looking at developments. For example, a lot of banks are going to close in the next 12 months as more banking goes online” Coath believes Epic’s ability to co-invest in sites, as well as the team’s proven track record, gives it strong appeal to pub companies looking for solutions at large sites that don’t fit the conventional managed approach. He says: “We can develop relationships with our customers, whereas the big brands are a little more faceless. I think what’s happened is the pub groups have developed most of the pubs within their estate that fit their managed model and now find themselves with some big properties, often with rooms or potential for rooms, that are a better fit with our approach and experience.” 185 Watling Street – a Georgian townhouse converted into a town centre pub – is a blueprint for a different approach. Coath


says: “Realistically, there are a limited number of opportunities with the pubcos for the type of site we want so we’re also looking at developments. For example, a lot of banks are going to close in the next 12 months as more banking goes online.” He also cites the example of Oakman Inns, which recently acquired a former nursing home to redevelop as a pub. Coath adds: “We’re trying to find these gems. We’ve had very strong trading figures at 185 Watling Street in a busy town centre. The Golden Ball is in growth in a saturated area for gastro-pubs while in Aspley Guise, The Anchor has brought the community together by opening a smart gastropub in a commuter village. Wherever we are, we want to become the centre of the community.” Coath acknowledges there is now plenty of choice for customers looking for high quality informal dining, not just from the bigger, managed operators that have picked up the gastro-pub gauntlet in terms of both menu and design with their premium formats, but also from the casual dining boom in town centres. To compete in this market, each facet of the Epic approach carefully dovetails. In design terms, each site is individual but there are common elements to the “brand essence”, such as reclaimed timber and ironwork on the bar. “I think our design, look and feel is very fresh, warm and appealing to both destination and local customers,” says Coath. “Each Epic establishment is unique in character and style but with the same consistent standards of excellence in our food, drink and service. We’re creating a collection of pubs that as well as offering beautiful bolt-holes for dining and drinking, are investing back into their local communities.”

Menu freedom Each site’s head chef has considerable menu freedom under Austin’s careful supervision. However, menus across the business are branded as Epic Food and complemented by Epic Drinks lists. All food is prepared on-site and freshly cooked. “Bi-monthly menu changes and keeping the food within the seasons is very important, as is being local, ethically sourced and sustainable,” says Coath. The growth in consumer interest in food quality and provenance means there are more suppliers out there than there were a few years ago. Coath says: “We’ve formed good relationships with our suppliers, they can see the opportunity from our current business as well as our growth plans.” Austin, whose CV includes the five-star Luton Hoo Hotel, adds: “Woburn Country Foods, our meat supplier, has been great to us. It will tell you exactly where everything is from – all the meat is from Bedfordshire – and it’s very good quality. The owner of the business walks in once a week and asks us what we need. In Rutland, we also use the local butcher and sell Melton Mowbray pork pies. “Stickleback, which we use for our fish, has gone from two men in a white van 15 years ago to £8m turnover. It is a family business – the service is amazing and the fish is much fresher. The company is growing with us.” In drinks terms, the wine range across the business is overseen by Reading-based Milton Sandford Wines. Coath says owner John


Feature 185 Watling St.

Winchester “always comes up with a good wine list, is always consistent on price, and is hugely supportive in terms of staff training and in supporting our Pub Club events.” Coath adds: “He’s a wine aficionado who really loves what we do and is proud to be working with us as we expand. “We encompass local ales wherever possible and our price for a pint is less than £4. We’re tied for beer at several sites so cocktails are an opportunity to make a good margin, and we have a good relationship with Diageo. Overall, our drinks sales are a good mix. Soft drinks are important because we have a lot of drive-to destination sites and coffee is a key part of allday trading. Bedford likes a lot of prosecco and wine, while Northamptonshire loves spirits and cocktails. We expand different elements of the drinks mix according to local taste.” With seven bedrooms at Mill Street and nine at The Knife & Cleaver, accommodation is seen as a third string to the Epic bow and is a priority as the business looks for more sites. “I’d like a 20-bedroom hotel if we could find one, and that part of our experience is part of our appeal to groups with big sites that need a lot of investment and a skilled operator to run them,” says Coath.


Cocktails at The Anchor

Epic’s split in favour of food across the business

The Anchor

The rooms are hotel standard, appealing to business and tourists alike. Coath says: “We’re in tourist areas like Woburn and Rutland and we’ve been doing breakfast and dinner packages in the pubs with rooms. We expect there to be more staycations this year because of Brexit, and we’re gearing up for that.” The post-Brexit economy brings challenges as well as opportunities and, in common with other operators, Epic is planning for rising food and drink costs. “Our prices have to be reasonable; there’s a broad spectrum of customers in villages and market towns and, at the moment, unlike some of our competitors, we get no price resistance,” Coath adds. “There’s going to be significant food inflation, we’ve already seen it with wine, but we’re not passing all of it on to the consumer. Wherever possible we’re keeping our prices reasonable.” The all-day food offer, including breakfast and afternoon menus built around sharing and sandwich dishes as well as lunch and dinner, helps to maximise trade. Working with the group’s suppliers, Austin has identified a number of fish and meat cuts that can be employed across the menus, delivering the required gross profit while still offering chefs the freedom to develop their own dishes. Austin says: “It means every pub can have a cod dish or a pork ribeye, for example, but we’re not creating a dish for them. We’ve negotiated a good price and they’ll make the gross profit, but they still get freedom with the dish.” Austin acknowledges allowing chefs to exercise their creativity while maintaining margins across the business is a juggling act, but he emphasises it is at the heart of what

makes Epic stand out. He says: “We’re making our bread, our dressings, our ice cream and sorbets all fresh. That’s our difference, and we’re enticing good chefs.” Coath adds: “We have chefs that have come to us from fine dining. Mark has given them the level of freedom they want and we keep them engaged with regular menu changes. We have to educate our guests to an extent to ensure they appreciate the produce, taste and quality in our menus and understand the value they get.” Alongside maximising day-by-day trading, special events are also key to the Epic model. In summer 2016, a DJ set by BBC Radio One’s Jo Whiley attracted 500 guests to 185 Watling Street. “We’re going to do some more exciting things this summer, using our outside spaces,” says Coath. “It has to be far more than a beer garden and standard barbecue food. People love to have a party so it will be a grown-up offer on Friday nights, Saturday is all about the family, and Sunday will be more relaxed, with chill and jazz. We want to give our guests a reason to stay in the area by trying to bring a little bit of London into our pubs in terms of pop-ups and the latest drink trends.” The customer programme also includes Pub Club evenings, held six times a year at each site. These are run in partnership with suppliers and include events such as sit-down game feasts, butchery classes and wine tastings.

Mystery visitor With a focus on maintaining standards, Epic is also launching its own mystery visitor programme, Epic Eaters. Coath says: “Reviews on social media have become very powerful so, along with some of our regular customers, we’ve recruited people who have left comments for us on TripAdvisor. We have ten for each pub who we’ll invite in for a dining experience through ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY



“Food has always been secondary to the business but we will be putting a lot more focus on this area” 185 Watling St.

Anchor bar

the course of the year, giving them the opportunity to give us constructive feedback.” Also on the way is an Epic-branded loyalty scheme, which will help support cross-site promotion as the business expands. Staff recruitment has been boosted by emphasising the opportunities available across the business, rather than at specific sites, through the Epic Pubs website. Coath says: “There are good people out there but the right people don’t always come knocking on your door, you’ve got to go out and find them. Many of our team have started with us as casuals and we give them an opportunity to consider a career in hospitality.” There is a trainee management programme offering frontof-house, bar, foodservice and kitchen experience. Coath says: “We’ve had real success with that and our retention levels are good. We run quarterly management training and development days. We also take our managers and deputy managers responsible for bars to Diageo’s development centre, working with its World Class Bartender programme. It takes staff from basic bartending skills through to competition level, and those skills are an important part of our cocktail expertise.”

In terms of geographic expansion, the estate “stretches from Rutland down to Maidenhead and, for the time being, we think those are our limits,” says Coath. He adds: “Our plan is that Bedford is the epicentre and we fill in. Our reputation with customers makes that much easier than going into a new area from scratch. We want more pubs in Bedfordshire, Buckinghamshire and Hertfordshire.” As to whether new sites will be partnerships with other operators for existing pubs or conversions from other use it is “opportunistic”. Coath adds: “We’re not just running at everything because there are so many people after every site. We’re concentrating on making sure the businesses we’ve got are cost-controlled, offering great customer service and making sure our food and drink offer is always different.” Coath is clear expansion has to be balanced with continuing to develop the five sites already trading. He says: “We’ve got some cracking pubs and great people in them but we’ve got to become established, and that takes time. We host our pubs incredibly well, and what stands us apart is our relationships with the community.”

“We hope to be at 15 pubs by 2019. We’re looking in other market towns at the moment. I think market towns and villages are our areas” On the chef side, Austin and his team of head chefs work with local colleges to identify suitable apprentices. “As soon as we find the good ones we get them in, look after them and get them up to chef de partie level in a few years,” says Austin. Coath adds: “We’re growing our next level of management as we bring trainee managers up to general manager level. At the moment, I think we are placed to do another two pubs in terms of people ready to move up.” Austin adds: “We’ve got two chefs waiting for when we have the pubs.” Coath says: “We’re a young company, and our teams feel they’re playing a part in our growth. We’re open and transparent and very honest about the opportunities.” That raises the question of further expansion of the business – the EIS agreement with Rockpool sets targets and timeframes, that Coath acknowledges “puts pressure on us, but equally our investors understand the opportunities have to be the right ones”. He adds: “They don’t want us to take sites for the sake of it. After three years we have to give a level of return to our investors and our hope then is for a management buyback, either for the group or for selected sites. “We’re looking to open another three pubs during 2017, we’re actively looking at opportunities for the later part of the year, and we hope to be at 15 pubs by 2019. We’re looking in other market towns at the moment. I think market towns and villages are our areas.”



Andrew Coath, managing director ■ Favourite cocktail: “Anything rum-oriented – I’ll have a caipirinha.” ■ Favourite meal: “I love Thai food.”

Mark Austin, chef director: ■ Favourite cocktail: “A Long Island Iced Tea.” ■ Favourite meal: “Chinese. Part and parcel of being a chef is that when you’re not in the kitchen, you want to eat different cuisines.”

Epic senior team (from left) – Mark Austin, Andew Coath, Wendy Twiddy and Jonathan Taylor

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Conference Overview

Night fever Backing Britain’s talent Some of the industry’s top operators spoke at the first People and Training Conference on the challenges of training, developing and retaining staff. Kate Oppenheimer takes a look at some highlights from the event at Bafta Piccadilly in London


n November, industry figures gathered in London for the British Institute of Innkeepers’ (BII’s) inaugural People and Training Conference held in association with Propel and Sky. Attendees heard the UK’s top operators discuss the training landscape and the challenges of staff recruitment, retention and development. BII chairman Anthony Pender opened the conference by quoting Richard Branson: “Train people well enough so they can leave, treat them well enough so they don’t want to.” That is, Pender explained, a key principle of his Yummy Pub Co, which he co-founded and runs with Tim Foster. Pender says:“It’s about nurturing talent. The costs of employment are going up and, as an industry that employs 1.2 million people, it’s about working together to develop training and maximise the funding available.” Training, staff development and an update on the latest government initiative on apprenticeships were all tackled during the afternoon, with the day ending with an all-star panel of business leaders discussing the future challenges. Key among these was what the industry should do to overcome staffing shortages and outmoded perceptions the sector is still not a proper one to work in. Beds and Bars chief executive Keith Knowles, Mitchells & Butlers chairman Bob Ivell, Wagamama UK managing director Sarah Hills, and Stonegate Pub Company chairman Ian Payne agreed the whole sector needed to work better together to present one voice to government, which in turn would win support for, and recognition of, the major contribution the licensed hospitality makes to the UK economy. Knowles said: “We train and invest, yet the government still does not see what we put in; what it takes to pull that pint or prepare that bedroom.” Speaking about the “new” workforce generation of millennials, he added: “This generation is smaller – there are fewer people to attract into our industry. While people don’t understand the quality of our proposition, the full


NITAs Awards, 2017

“The opportunities for people are here, we just need to get the message across”

Stonegate Pub Company chairman Ian Payne


Conference Overview breadth of opportunities on offer or that there aren’t the glass ceilings other industries have, we need to work together and campaign to get this message out.” Ivell agreed, saying schools and parents were reluctant to encourage their children to enter the leisure sector, yet the opportunities on offer were fantastic. He said: “We still haven’t managed to get the message through to the degree we should. Companies work hard to get their messages across about their own business, and you’d think with all the programmes on celebrity chefs that these would help us recruit, but it doesn’t seem to.” Many pubco senior executives and directors in the audience had worked their way up the ladder through sheer hard work to establish highly successful careers. Payne reinforced this point by revealing all but one of Stonegate’s four executive directors started on the shop floor. “The opportunities for people are here, we just need to get the message across,” he added. Pender revealed plans for a new type of BII membership – Workforce – that launches this year. He said by targeting 1.2 million new entrants, including apprentices, Workforce would galvanise interest in the licensed hospitality sector and bring new recruits into BII’s professional membership from the start. “One thing we are all agreed on is there’s a need to empower all our employees,” he said. He added reaching out to young and new entrants to the sector and offering them support as well as showing them the opportunities and the career paths that exist was fundamental to promoting the industry as a fun and relevant place to work and develop. He said in much the same way as the Campaign for Real Ale had grasped the government’s ear by representing its large and vocal membership, Workforce would give a voice to the tens of thousands of trainees, part-time workers and apprentices entering our sector. He said: “The BII awards 120,000 qualifications a year and, with our new Workforce membership, we will bring all the elements together to create energy and noise that will, in turn, support your training systems. Most people enter our trade on a part-time basis, and it’s time to capture these people and show them the exciting career paths.”

Spotlight on apprenticeships Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers (ALMR), set out the key elements of the government’s proposed Apprenticeship Levy at the conference, explaining how it would affect the sector. From May, the government’s new Apprenticeship Levy proposes taking 0.5% of an employer’s salary for all businesses with a UK payroll of more than £3m, to fund and support apprenticeships. Nicholls explained while much of the detail was still missing, the principles were that businesses could earn £1.10 for every £1 they paid if they employed an apprentice. The levy would be paid monthly as part of PAYE, with government providing a digital account where employers could select an apprenticeship standard, choose a training provider and assessor, and post apprenticeship vacancies. She added the changes would also be more wide-reaching, affecting all employers as smaller firms would no longer be able to claim back 100% of their apprenticeship funding, which would result in all employers making contributions. Apprenticeships, Nicholls concluded, were a tool to help companies plan succession, enhance staff loyalty and increase retention. “Trained, loyal, competent staff will grow the business on the front line,” she said, adding that businesses should take advantage of what’s available before the levy is launched in order to get 100% apprenticeship costs back. The industry getting behind apprenticeships, she added, would play a major part in changing the perception of the hospitality sector as one that offers low paid, dead-end jobs. Annette Allmark, director of strategic policy at People 1st, the sector skills organisation for the hospitality industry, set out the benefits of apprenticeships in more detail, adding offering

“Most people enter our trade on a part-time basis, and it’s time to capture these people and show them the exciting career paths”

Anthony Pender, chairman of the BII apprenticeships could “improve the bottom line” as employers involved with schemes were “80% more likely to retain staff”. Allmark explained with 993,000 new staff needed by 2022 and recruitment costing the industry £274m, finding ways to keep employees engaged so they remained in the industry was important. Government apprenticeship reforms have been focused on employers driving work-based programmes and improving standards on skills, knowledge and behaviour. “The new apprenticeship process will make sure that at the end someone can do their job really well, with training lasting at least 12 months,” she said. It is about training a member of the team to become a supervisor, then a manager. “A commis chef to chef de partie to senior chef in culinary art,” Allmark explained.

Insight into millennials Paul Flatters, founder and chief executive of research and consumer insights company Trajectory, focused his presentation on millennials. He put commonly held views that millennials are workshy youngsters who can’t get out of bed in the morning into perspective, explaining that rather than being lazy they were looking for the work/life balance as demanded by Generation X (born 1965 to 1981) and the baby-boomers before them. Flatters said millennials were a generation that faced a future of nonhome ownership and long-term private renting, while seeking careers in a challenging employment environment, which meant they’d probably be living at home with parents longer than previous generations. He said: “There’s a fragility in the labour market. The millennials hear on the news about zero-hours contracts and employment cuts. They are the best educated generation in history and have a sense of being put upon – they’re the first generation to have been saddled with large student debt and they ask themselves ‘is it worth it?’” ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Conference Overview “People aspire to work for TGI Friday’s and will bring their friends and family along. We are trailblazers in training and development, and we are all proud of where we work” Jacqui McManus, director of culture and people development at TGI Friday’s Flatters explained one of the biggest challenges for employers today and in the future was having a workforce spanning four generations. Learning how to communicate to this workforce would be demanding and require flexibility and a broader understanding of how each generation liked to operate. He quoted one example as one in ten millennials use their smartphone by 6.30am, compared with only 2% of over-65s. When it comes to communication, no one size fits all. Millennials are that little bit harder to please, Flatters explained. “They are free to move around – footloose. They are digital natives – far more ready to use digital connections.” They are also the healthiest generation, compared with previous generations, with more tee-totallers than heavy drinkers. Flatters light-heartedly suggested if bosses wanted to avoid cross-generational conflict in the workplace, they should keep talk of politics, especially Brexit, out of the business. He added: “When you consider 71% of millennials voted to remain against 36% of over-65s, it’s a topic that’s going to lead to fighting!”

“Tribes injects a fun, family feel to the business” Chris Hill, chief executive, New World Trading Company


It’s all about the team Creating positive, fun environments where employees are encouraged and supported in their learning and career paths was a common theme throughout the conference. Each business has its own way of uniting its teams. Some focus on long-term development, others such as Yummy Pub Company actually trained its staff to leave after 18 months! “Having pride in something isn’t just about the bottom line. It’s part of something bigger,” said Foster, explaining the company’s seven stages of development lead an individual from induction to ownership, with many former employees leaving Yummy to start their own businesses. During those 18 months, Foster explained, team members gave “their all” to the business. Yummy is also a proponent of giving back in other ways, with schemes that employ homeless youths. Chris Hill, chief executive of New World Trading Company, which listed 20th in the Sunday Times Fast Track 100 and has sites spanning 426 miles from Glasgow to Farnham, offers a different approach to his team. New World Trading Company has developed a programme called Tribes, which is based on the school “house” system and unites people from different sites in one of six houses to compete against each other. Competitions to earn points for prizes centre on rewarding members for what Hill describes as the “good stuff”, things carried out beyond the business such as raising money for charity and random acts of kindness rather than within the business. Inter-house meetings unite six people from each unit to compete and have fun through It’s A Knock Out-style team-building events. “Tribes injects a fun, family feel to the business,” said Hill, adding the company achieves 87% staff engagement. Jacqui McManus, director of culture and people development at TGI Friday’s, focused her presentation on family. With 5,401 staff, McManus said TGI Friday’s was all about “people”. Listed 25th in the Sunday Times 100 Best Big Companies To Work For, McManus said TGI Friday’s strong culture, where staff worked with people they loved and had fun with, had its foundations in allowing teams to make decisions about who joined them. She said: “People aspire to work for TGI Friday’s and will bring their friends and family along. We are trailblazers in training and development, and we are all proud of where we work.” Spending time at work with their prospective team is an essential part of TGI Friday’s recruitment process and, once employed, the company blends learning on the job with clear progress measurements. There are 32 programmes with schemes such as peer-to-peer nominations, and motivational ▲



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Conference Overview Promoting the benefits

CPL Training chief executive Daniel Davies said training that suited the individual rather than a one-size fits all approach was the way ahead

Living Ventures director of training and compliance David Mansbridge told the conference: “Hours in this industry are horrendous and kids today don’t want to work the hours. We try to accommodate them as much as we possibly can. “We love our people to stay with us and provide them with private healthcare, pensions and staff discounts that give them 50% off in our restaurants. We also provide them with opportunities for real progression and promote from within.” Mansbridge said fun competitions and rewards were key to Living Ventures’ offering. He added: “At head office, we see ourselves as working for the guys in the units. They can rely on us for help and advice. We are all trying to fish in the same pond, so we believe in really working hard so our people want to stay.”

Small footsteps to success

and recognition schemes. McManus said: “Our culture defines us. We’re open and honest and staff feel they belong, included and part of something.” Fiona Regan, people development director of Revolution Bars Group (another one of the Sunday Times Top 100 Best Companies To Work For), said the firm was recruiting for seven to ten bar openings a year and had developed an academy, a front-of-house development programme that would move people through from supervisor to assistant manager. “More than 65% of all our managers come through our academy,” Regan said. “It shows our employees the career path they can take to become a general manager and creates strong succession within the business, with about 17 deputy managers a year ready for promotion to general manager.” Staff surveys and a culture that shows teams the company is open and encourages feedback are at the heart of Revolution’s approach. “We listen and respond to feedback in the same way we listen to customer feedback,” Regan said.

As a pan-European bar and hostel operator, Beds and Bars faces more complex challenges. Yet, through its unique, award-winning training structure, it has become known for its industry-beating staff retention rates. It is also one of only eight UK companies to have achieved the Platinum Standard set out by the Investors in People framework. “Our company training scheme, Footsteps, is about making our industry great, not just our company,” said Beds and Bars HR and training manager Mark Vaughan. “Footsteps is a career path, with seven steps that will take a junior member of the team to general manager with rewards and recognition.” Footsteps was developed by Knowles’ late wife Franca. It is a training and development proposition that complements each step an employee takes within the business and helps staff better understand the company’s values. “We drive our people to be the best they can be,” said Vaughan, adding Beds and Bars’ Rising Stars programme provided additional support for those in leadership positions, with training to build their confidence in leadership skills, including public speaking, equipping them to be able to share their knowledge and skills with their team. ▲

Best practice in a changing landscape CPL Training chief executive Daniel Davies said training that suited the individual rather than a one-size fits all approach was the way ahead. Davies suggested training programmes needed to be built in the same way people create their own music selections though apps such as Apple Music. He said head offices needed to understand why people had joined their business, who were the rising stars, and who was overperforming – information that would help businesses deploy the best people in the best positions. Davies, who speaks at schools and academies, said young people would reconsider their futures in terms of GCSEs, A-levels and universities to gain the right positions and opportunities. He introduced 17-year-old Callum, who had heard Davies speak at school and felt inspired to develop his skills through an apprenticeship with CPL.

“Our company training scheme, Footsteps, is about making our industry great, not just our company,” said Beds and Bars HR and training manager Mark Vaughan ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Conference Overview

Night of the NITAs Following the People and Training Conference, many attendees moved on to the National Innovation in Training Awards (NITAs), which took place in the evening at Cafe de Paris in London’s West End. The awards, relaunched by the British Institute of Innkeepers (BII) in partnership with Sky and organised by Propel, recognises those companies and individuals for whom people and training are at the heart of their business. First run in 1991, the NITAs were relaunched this year with the winners unveiled at an awards ceremony.

The winners were – Professional Trainer of the Year: Donna Hewitson, of People Stuff Matters; Individual Operator Trainer of the Year: Glen Duckett, of the Eagle and Child in Ramsbottom; Training Company of the Year: Diageo in collaboration with The Springboard Charity; Best Licensee Development Programme (leased and tenanted companies): Greene King Pub Partners; Best Managed Company for Training (fewer than 30 sites) – winner: Anglian Country Inns, highly commended: Fayre Inns; Best Managed Company for Training (more than 30 sites) – winner: Stonegate Pub Company, highly commended: St Austell Brewery. The Franca Knowles Live Your Life Award was won by Stonegate Pub Company chairman Ian Payne. The accolade was chosen by a panel led by Keith Knowles, chief executive and founder of Beds and Bars and identified and recognised an individual working in the on-licensed retail sector who leads by example and demonstrates that training and people are at the core of what they do. The award was in memory of the late Franca Knowles, Keith’s wife, who was herself a multiple winner of NITA awards. Meanwhile, a new award for 2016, the NITAs Special Innovation Award, was presented to Keith Knowles in recognition of him and his whole Beds and Bars team as a “leading example of how innovative training can work in modern retail businesses”.


BII chief executive Mike Clist said: “The most successful individuals and businesses in the licensed retail market today are those that truly invest in, support and champion their people. It was therefore absolutely essential that the BII relaunched the NITAs for 2016, to celebrate and share their success so we can raise standards of training across the board and encourage further innovation in this area. The bar has been raised high by the winners of the 2016 NITAs, each of whom has demonstrated how they creatively use time and resources. In particular, the involvement of staff in designing training programmes can benefit an entire business from the ground up and directly impact financial performance and growth. Huge congratulations from the whole team at the BII go to our 2016 champions and all our finalists. Our grateful thanks also go to the panel of expert judges, who spent a lot of their time with the finalists face-to-face before selecting our worthy crop of winners. I am delighted to be able to recognise the personal contributions made by both Ian Payne and Keith Knowles in advancing the standard and quality of training for our whole industry. Both have shown what it can do for a business to have a leader who truly values investment in people and treats their team members – even those just starting out – as potential business leaders of the future.”


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Embrace new tech …but don’t get into bed with just anyone Technology is transforming the casual dining industry and there are many reasons why pub and restaurant businesses are taking a long, hard look at their existing platforms. To date pub and restaurant IT systems have evolved on an ad-hoc basis. So, for instance, the EPoS system doesn’t integrate with the marketing database and the website isn’t connected to the table management system. All were introduced at different times by different people for different reasons. The overall effect is that many businesses are missing out on significant opportunities. But this is changing rapidly as the industry becomes more tech savvy. Take two leading brands for example: PizzaExpress and Bistrot Pierre have recently integrated new platforms into their organisations, with impressive results around business operations, employee job satisfaction and the customer experience. Other pubs and restaurants that are closer to full digital maturity have also demonstrated how embracing technology and unifying their systems can automate many everyday interactions. They can add value with digital menus, create more targeted loyalty schemes and apply data analytics to gain deeper customer insight.

A few flies in the software soup In an increasingly competitive marketplace, SaaS is now a key agenda item for many pub and restaurant businesses. But it’s important to remember that not all cloud services are created equal. Many services are cookie-cutter operations with a one-size-fits-all approach, meaning they might not be the perfect fit for every organisation. Costs are a concern as well. In addition to a fixed monthly subscription some services also charge per-cover fees. These can be hefty: commission can currently be as high as £2 per cover if booked via a third party website, and £0.25 for a booking through your own website. The key point is to research your potential partner before you accept their invitation to dinner. Like all new relationships, research the technology, ask the right questions and prepare your organisation for change before you migrate to your own new platform.

Primed for Change? Explore the lessons learned in casual dining when rolling out new technology

One of the most important technological developments is the arrival of Cloud Computing and Software as a Service (SaaS). That’s because effective SaaS solutions are relatively easy to implement, require very little initial investment and can scale up or down according to your business needs. Even something as straightforward as integrating a website/mobile app with the electronic diary can make an enormous difference to occupancy and efficiency.

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Deciding factors The findings of Elliotts’ How Diners Make Decisions survey, revealed at the Propel Marketing Masterclass, show a robust understanding of consumer behaviour can help deliver competitive advantage at what could prove a tough time for the industry, says Ann Elliott


he one key thing that really drives our insights team is getting under the skin of consumers and understanding their motivations. In other words, ascertaining “what makes them tick”. As a company, we recently presented the findings of our How Diners Make Decisions survey at the Propel Marketing Masterclass. We repeated an exercise we conducted in 2016, speaking to 1,000 consumers across the branded pubs and casual dining sector to get a grip on their experiences. We asked them a series of questions about the last time they visited a venue for the first time. Crucially this year we were able to track how behaviour had shifted during the past 12 months. We based this research, which we conducted in partnership with MORAR, on what we understood the extended customer experience to be. Where did the first moment of inspiration to eat come from? After this lightbulb moment, what research did they do? Were they booking and how? What was the experience itself like and what influenced it? And finally, how are respondents sharing their post-experience? Let’s look at the figures.

Inspiration Regarding inspiration, much like 2016 word of mouth is dominant. Women are more likely (60%) to take inspiration from recommendations from friends and family than men (53%).

However, it’s actually the younger generation – under-30s (58%) – who are most inspired by a word-of-mouth recommendation. For over-50s, this decreases. This is substantially more powerful than social media, as only 28% said they had seen a friend mention the restaurant they visited on social media. This may still be dwarfed by word of mouth but has grown by 3%. As Facebook continues to make “checking in” more seamless, expect this to rise. Meanwhile, more than half (53%) of inspiration to visit came on spotting the restaurant while “on the go” – almost 10% higher than last year. The simple takeaway here is frontage and external comms are so important in a market with everincreasing competitive intensity.

Research Almost two-thirds (64%) of respondents looked at the venue’s website prior to their visit – this figure may seem low but is a 10% increase on last year. These respondents are consumers looking for “bang for their buck” and doing the research to get it. Across the board, it is the under-30s doing the most research, especially in the south and London.

“The simple takeaway is frontage and external comms are so important in a market with ever-increasing competitive intensity” More than half (58%) look at price. Again, this is an increase of 3%. Interestingly, though, in theory that leaves 42% of restaurant or pub covers coming in with no real price expectations because they have not carried out research. Only 28% of respondents looked at online reviews such as TripAdvisor before their visit. The story this data tells us is that during the past year consumers have become less trusting of third-party reviews and are coming direct to source to conduct pre-visit research. Therefore, your brand’s online presence is more important than it was 12 months ago. ▲ ¡ SPRING 2017 ¡ PROPEL QUARTERLY


Feature Opinion


of respondents said a ‘casual get-together with friends or family’ was their top reason for eating out

Booking Fewer consumers are booking ahead before their restaurant visit – 59% now don’t bother to book. The cold hard reality is almost six out of ten consumers have no intention of making a restaurant aware they are going to visit. This will obviously vary from segment to segment but is something to bear in mind – venues and staff need to be equipped to deal with spontaneous visitors. A male under 30 is the most likely to try to book (62%) – perhaps it is easier for them to leverage review sites and booking platforms thanks to growing up tech savvy? Phone booking actually went up in frequency by 4% – most commonly this is among the over-50s. Only 43% of respondents’ bookings were made at home. If you consider the prevalence of “on-the-go” inspiration, there is a reality now that people get inspired, book (if they’re going to) and travel to a restaurant, all while they are out and about.

Experience New for this year, consumers were asked to point out the “occasion” they were visiting for. Top of the list was a “casual get-together” with friends or family (36%), ahead of a “special occasion” (30%). These two occasions combined accounted for twothirds of respondents’ visits. In little more than a decade, cafe bar brand Loungers grew from one to more than 50 sites by capitalising on casual occasions, similarly with Bill’s. The casual occasion is key. On arrival at a venue, 88% of respondents said they paid attention to the interior decor and design of the site within the first two minutes – 84% gauged the atmosphere. Consumers are favouring elements such as design over more practical elements like location. In an age where Deliveroo provides consumers with the opportunity to bring casual dining to their doorstep, it is more important than ever for restaurants to capitalise on design to provide an excuse to visit. Compared with last year, even more respondents were satisfied with the range of choice on menus (88% versus 85%). It is a ringing endorsement the more focused menus we’re seeing across casual dining and pub segments are proving the right move. Interestingly, almost two-thirds (63%, up 2% from last year) knew what they wanted before arrival – a knock-on effect of more people looking at menus and websites pre-visit. Another new addition this year was a “value equation” section. Participants were asked to go through 20 elements of a customer journey and identify which five they felt were most important in ensuring their experience was “value for money”. What really shone through was food quality, which appeared in 86% of lists, ahead of cleanliness at 85%. Service and price (both 80%) and authentic food (74%) were not far behind.


These four attributes, most pertinently food quality, are then divided by (or rather ratified against) price to develop the final “value for money perception”. Consumers have a clear “value equation” and, while price is a factor, it isn’t at the forefront, food quality is. THE KEY NEED









Paying the bill Cash has made a comeback compared with last year, with 39% using cash during their most recent visit. This is a significant jump versus last year’s data, yet it remains the over-50 northern male who is most likely to pay by cash. Contactless payment was included in questioning for the first time this year, with 18% of respondents using it during their previous eating-out experience, so it’s already accounting for almost a fifth of payments. It is slightly more common among males (19%) in London and the south, as is app payment.

Sharing the experience Post-experience, almost two-thirds (62%) shared their experiences, good or bad, after their visit. Women (69%) are more likely to share compared with men (55%). Interestingly, word of mouth was the strongest sharing mechanism, far ahead of social media. It’s a recurring theme – consumers are more likely to be influenced by a word of mouth recommendation and, in turn, are more likely to make one.

And finally… Last year was full of surprises so it only felt right to include Brexit in the list of questions. In the wake of Brexit, 28% said they would eat and drink out less during the next 12 months, significantly higher than the 17% who intend to do so more. A robust understanding of consumer behaviour can help deliver competitive advantage at what could well prove a tough time for the industry.


Ann Elliott is chief executive of leading sector marketing and PR agency Elliotts – Follow her on Twitter: @elliottsagency

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What we can learn from the US market As the US market matures matures, Ian Dunstall looks at what measures we can take to protect our UK brands and businesses against comparable challenges

Eatsa kiosks


ike many in the industry, I have been a regular pilgrim to the US restaurant market to observe and admire the latest brand innovations. Brands such as Cheesecake Factory, Houston’s, Seasons 52 and PF Chiang have been important in my continued education of hospitality excellence. However, the US market is maturing and has some key structural challenges. What is happening and what can we learn to protect our UK brands and businesses against comparable challenges?

relatively successful example of positive evolution – is almost 87 having been founded in 1930. Many of these brands, especially in the QSR and casual dining segments, have grown into scale institutions (many casual dining brands operate between 800 and 2,000 locations and QSR between 2,000 and 7,000 locations – McDonald’s has 14,000!). As the market toughens, Darwinian principles imply survival of the fittest, but these brands have become too large to fail. Inevitably some of these brands will contract, eventually at least one of them will expire. A market in malaise Credit the brands that have managed to continually Study US restaurant sector news feeds and it’s clear the nation’s reinvigorate and reinvest to remain relevant but increasingly industry is in a significant long-term malaise – in October the some of the older casual dining and QSR brands are looking casual dining segment was reported to be in its 16th tired and their proposition is at increasing risk of straight month of decline, while quick-service was losing relevance and attraction to the modern US in its seventh straight month of decline. consumer. “For years we Previous trend analysis has indicated there have admired the Over-focused on convenience has been a structural demand shift in the continual scale and and value? market away from established quick-service We have long observed the intensity of growth of the US restaurant (QSR) and casual dining brands US competitors and the propensity for into the emerging fast-casual sector – but restaurant industry. US diners for high-frequency, out-ofeven this sector is showing evidence of It appears that in the home “meal replacement”. This has been slowing growth as the market matures and short-term, maximum fuelled by intense promotional discount competition between the emerging fastcapacity has been to encourage higher visit frequency plus casual brands intensifies with scale. a relatively high focus on carry-out (or even reached” For years we have admired the continual drive-thru) convenience to encourage the “on the scale and growth of the US restaurant industry. It move” refuelling market. appears that, in the short-term, maximum capacity has However, in the process some of these brands have been reached. lost the experiential and sensory magic of the overall experience. Time for a shake out? Value for money is not simply about low price – it’s about the service, ambience, personality, quality and price. This transforms While demand is at best static, the in-flow of attractive new a hospitality-based business from a commodity to an experience. entrepreneurial concepts in the US continues to attract the My observation on recent US visits is many of these interest of consumers. And these exciting new competitors traditional scale brands have become transactional and too are share-stealing from established large-scale brands that charmless and functional. They have transformed from the are well into middle age and beyond. Many popular brands unique to the ubiquitous. ▲ are now 50-plus years old. As an extreme example KFC – a ¡ SPRING 2017 ¡ PROPEL QUARTERLY



Pret A Manger, Theater District, New York

Shake Shack

Are new trading opportunities the answer? Facing the challenges of declining core demand, US restaurants are chasing new channel opportunities – office catering services, take out, express lunch and delivery. These are important and positive opportunities – done well they provide incremental revenue and increase the relevance and reach of the brand for more customer occasions. And brands have to adapt their offer to remain relevant, when and how consumers want to access the offer. The risk, however, is the brands lose the focus and obsession to drive their core brand experience and daypart focus. The challenge is how to ensure these do not dilute the core role of the dining experience, otherwise the brands experience a further role shift – from a hospitality experience to a refuelling stop. We also observe this trend in the UK – as core lunch hour and midweek evening occasions diminish, brands seek to grow breakfast and more recently delivery services. The challenge is to use these new opportunities as incremental trading opportunities and not to dilute the focus or quality of the core dining occasions.

Rebalancing the export trade It feels the tide of restaurant innovation is also turning. There are still great US exports such as Five Guys and Shake Shack arriving from across the Atlantic but, in counter balance, some of the UK’s brightest and best are heading west. In New York, the “shiniest” brand I recently observed on many prime estate street corners was Pret A Manger, which now has almost 50 sites in central New York. Pret is a fabulous example of a brand that has remained true to its core brand principles and continues to execute the offer to the highest standards. Other successful brands entering the US shores include YO!, Wasabi, Nando’s and Wagamama.

“While Eatsa is an interesting trial of technological extremes, does removing all human interaction with customers tear at the soul of a ‘hospitality’ experience?”


Still leading in technological innovation The US brands have been relatively early adopters of technological applications to enhance business efficiency, both for operators’ and guests’ benefit – from high-temperature ovens for faster cook times to guest technology to improve order and payment processes (“beat the line” pre-ordering apps are the relative norm in many sectors). One recently observed extreme of technological evolution is Eatsa, billed as the “first fast-food chain in America that requires zero human interaction”. When customers enter Eatsa they order food at an iPad kiosk, then wait in front of a wall of glass cubicles where their food will appear when ready. Hidden behind the wall, kitchen staff prepare the food. When an order is ready, an employee places it in one of the cubicles. The door to that cubicle then lights up with the name of the customer who ordered the bowl. When the futurist John Naisbett (Megatrends) forecast the future impact of technology on our lives he described it as “high-tech/high-touch”. While Eatsa is an interesting trial of the technological extremes, does removing all human interaction with customers tear at the soul of a “hospitality” experience?

Lessons learnt for the UK market Historically, the US market acted as a barometer of the UK hospitality market. So what lessons can we learn from the current US malaise to influence our UK businesses? Firstly, lets applaud how the UK market has come of age. It is a compliment to the UK industry that so many UK brands are exporting into the US and that we are relatively less impressed by US brand evolution now there is so much positive concept development in the UK market. However, the current barometer indicates the UK market is rapidly changing, with the stable economics of the past five years being challenged in many areas of demand and supply. The winning UK brands in this more challenging new world will be those that retain their fanatical focus on the unique magic of their individual brand experience. While being open to new trading opportunities, they should not be over-promiscuous and become a “jack of all trades” – the winning brands will ensure they nurture the core essence of their brand and ensure any new trading opportunity does not compromise this core experience focus. They will also understand the true meaning of giving value to the guest. It’s not about lowest price – it’s about a competitive price that enables the guest to afford to access the quality of the total brand experience.

Ian Dunstall is a brand consultant advising hospitality businesses on brand strategy and development. He has a strong legacy of success, including startup brands and brand revitalisation






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People power Automation of our everyday lives is a natural progression but in hospitality the human factor is a real point of difference, says Intelligent Business Systems managing director Gareth Powell


read a quirky, fun story the other day. Residents and businesses in Redwood City, California, and Washington DC are having food delivered to their door, by robots. The two-foot tall, six-wheeled machines weigh in at about 40 pounds empty and travel at 4mph, just above walking speed. At the moment the robots are accompanied by handlers but the aim is to have them operating solo once they’ve been thoroughly pavement-tested! It sounds like something out of a sci-fi movie but a robot delivering food is just one of numerous innovative ideas racing around an increasingly technology-savvy automated world. The Guardian has also reported car manufacturer Volvo is seeking drivers who commute into London. Volvo wants them to take part in its self-driving cars trial, the largest test-drive ever conducted by the automobile industry. Volvo’s ultimate ambition is to make operating self-driving cars as easy as using a smartphone. Jaguar Land Rover and Ford are also undertaking trials for an innovation that US government research predicts could lead to an 80% decline in the number of car accidents by 2035. In the hospitality sector, Forbes reported Hilton Hotels has been giving Connie a run out at the Hilton McLean Virginia in Washington. Connie is a quasi-concierge robot powered by Watson artificial intelligence from IBM. All three technologies are great fun and pointers to the future, although Volvo’s boss reckons it will be 30 to 40 years before fully autonomous cars are in everyday use, while Connie’s appeal will stand or fall depending on the human interaction around her!

“Hilton Hotels has been giving Connie a run out at the Hilton McLean Virginia in Washington. Connie is a quasi-concierge robot powered by Watson artificial intelligence from IBM” While we will have to wait for self-driving cars, automation of our everyday lives is a natural progression as technology becomes increasingly culturally embedded around us. Using the internet on a regular basis is second nature for the vast majority of us. According to the Office for National Statistics, eight out of ten adults in Great Britain accessed the internet on a daily or almost daily basis in 2016, compared with 35% a decade ago. Last year, 70% of adults accessed the internet “on-the-go” using a mobile phone or smartphone, nearly double the 2011 estimate of 36%. In 2016, 77% of adults bought goods or services online, up from 53% in 2008. Clothes or sports goods were purchased by 54% of adults, making them the most popular online purchase in 2016. In the hospitality sector, automation is the name of the game. Hands up those of us who have changed how we order and pay for takeaways, food to go, and eating out in restaurants from three or four years ago? We’ve been operating in the cloud for more than eight years and were one of the first to fully embrace cloud technology. Today, potential hospitality clients see 100%


cloud-based systems as an essential requirement when specifying solutions. Equally, we use application program interface (API) technology to integrate with more than two dozen key applications, covering everything from mobile payments and booking tables in advance to managing staffing levels and online ordering. We understand technology’s ultimate endgame is about making the end-user’s guest experience as enjoyable and as smooth as possible. No matter how sophisticated or smart the technology at our disposal, an emotional human connection is still essential in a hospitality sector that now employs almost as many people as UK manufacturing. Our solutions are designed to manage multichannel pressures. This includes the enormous challenge of streamlining platforms and systems to place the guest experience at the heart of everything operators do. We help hospitality retailers achieve a seamless omnichannel customer experience through cross-channel data synchronisation, easy promotions and loyalty programmes and free them up to provide an enhanced level of personal customer service. After all, when you go out for a meal it is the quality of the food and service you enjoy and share with friends afterwards. For proof, glance through any web reviews for restaurants and read the comments. Operators managing their online reputations know poor service can make the difference between success and failure. Good as our technology and solutions are, the human factor is a real point of difference. I recently received a charming note from a client, a senior director moving on to pastures new. In his email he commented it was a pleasure working with Intelligent Business Systems and I quote: “It’s been such a pleasure working with you all. Professional, hard-working and good people. Thank you for helping me and the team here deliver a truly wonderful EPOS solution.” The personal touch was a common theme for two new additions to our client portfolio. Emmett Loughran is chief operating officer of the Japanese Centre Group. He has worked with other EPOS providers who “tend to leave you to it”. He said: “If you lose data or make a mistake, it is tough luck. IBS will do everything to help you. I love such passion and commitment to what they do. That extra care is important to us.” Brighton Pier Group IT manager Richard Price recognises the difficulties of working with larger corporate technology providers: He said: “It was very frustrating asking for simple day-to-day things and having to jump through hoops to get a simple, straightforward answer. With IBS they can get things done immediately and everything is much easier.” Our business is geared to factor-in the human touch. That’s why we always ensure our telephones are answered by a person rather than diverting calls through an annoying automated system. It’s why we have a shift system where support technicians are available to talk one-to-one to clients between 7.30am and 9pm. It’s why we rarely sub-contract installations to third parties and why we won’t be employing robots to make coffee for you if you visit our head office.

Gareth Powell, is managing director of Intelligent Business Systems –


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