Staying alive The recent troubles at BHS are another example of where we have to stay relevant to survive, especially when it comes to technology, says Intelligent Business Systems managing director Gareth Powell
eadlines about the administration of fashion clothing retailer BHS in controversial financial circumstances masks an underlying inability or unwillingness to respond to changing consumer tastes and buying habits. A superb Retail Week opinion piece by George MacDonald explains: “BHS has not failed because of its pension deficit. It hit the buffers because it lost relevance… now 88 years old, the BHS name probably won’t make it to a century – it simply, sadly, no longer has the pulling power.” Watching and reading about BHS unravelling is another warning shot to all of us involved in hospitality retailing. Clearly, nothing ever stays the same. BHS is one of many once famous brand names that have vanished from the high street – C&A, MFI, Woolworths, Comet, Jessops, Phones 4u and Blockbusters are just a few that spring to mind.
brands with 25 to 99 outlets had grown outlet numbers by 36%. The biggest brands had grown numbers by only 21%. “It’s the small entrepreneurs who are really driving growth,” Martin said. “This is an incredibly dynamic market.” Dynamic is the operative word and is reflected within our client portfolio. The vast majority of our clients are growing businesses which are opening more outlets on a regular basis rather than downsizing.
“Watching and reading about BHS unravelling is another warning shot to all of us involved in hospitality retailing’” BHS, Leeds – picture by Michael Taylor
The hospitality sector is not immune to failure but because the cash shortfalls, pension deficits and job losses are much smaller, so are the headlines. Pulling power behind the bar, for example, is steadily in decline as the number of drink-led pubs in the country shrinks, according to the third issue of Market Growth Monitor from Alix Partners and CGA Peach, the pub and restaurant trade data specialists. On the plus side, restaurant operators saw a 1.6% rise in outlet numbers in 2015, equivalent to two openings per day, although there was a caveat to this growth. Operators have to be at the top of their games in a highly competitive market where, according to the Monitor, “every inch of market share is going to be hardwon this year”. CGA Peach vice-president Peter Martin told delegates at a conference, organised by Numis Securities in the City of London, that the branded restaurant chain is the fastest growth sector in the food and drink market. Small chains with less than 25 outlets lead the way, with outlet numbers growing 48% since 2011. Medium-sized
One of our most recent additions, Boparan Restaurant Holdings, has announced major expansion plans to open more than 300 Harry Ramsden’s sites in the UK and grow its FishWorks brand to a 50-strong estate over the next five years. This is alongside further planned expansion overseas in China, Dubai and New York. Sourdough pizza chain Franco Manca, owned by Fulham Shore, which also owns the Real Greek, currently has 20 stores and plans to open another seven by the end of the summer. The Revolution Bar Group, currently operating 60 premium sites, has three new outlets lined up over the coming months. All three are typical of our target client – ambitious expanding hospitality businesses benefiting from bespoke EPOS-based hospitality management solutions operating exclusively 100% in the cloud, a space where we get a lot of our pulling power. We were probably the first EPOS specialist in the UK to offer its entire product range via the cloud, beating even the dominant player in the EPOS sector, which claims to service 75%
of the managed house pub companies in the UK. Our decision to move exclusively to the cloud was taken several years ago and represented a substantial investment for us, especially as it was made during the biggest and most terrifying global recession in my lifetime, when we literally did not know what tomorrow might bring to the table. At the time, it could have been a real risk but it was one we had to take to stay relevant to the hospitality sector. Fortunately, we also took the decision many years ago to develop and support all our products in-house. This gives us unprecedented control over how we run and manage our business. Software development work, helpdesk support, site installations and training are handled by the IBS team rather than sub-contracted out to third parties. This enables us to make the right choices at the right time to benefit our clients and ourselves. For instance, we’ve recently added two new features to our kitchen video management system in response to client feedback. Desserts and Mains Away is the smarter, quicker way to prepare food for customers, while Priority Orders allows staff to queue-jump an order. For example, if they’ve missed a meal off the ticket. Both new features enhance the guest experience and improve efficiencies in the kitchen. We’re constantly upgrading and updating our software in response to client requests to ensure our technology works even harder for them in the future than it does now. EPOS is the core product while others, such as online shopping, loyalty and reporting, revolve around it. In the vast majority of cases, when we enhance our products we’re likely to offset part of the development costs as the new upgrades will be made available to other clients. But don’t take my word for it. Here’s what Rick Stein’s Martin Glinski said to us recently: “IBS has a very nice approach. We talk through the functionality requirements and then they tell me they’ll get back to me with a yes or a no. If it is a yes, they’re able to develop quickly, which is what we need as every site of ours is different with its own challenges. Each concept requires a versatile EPOS solution.
Gareth Powell is managing director of Intelligent Business Systems – www.ibs-systems.co.uk
www.propelinfonews.com ¡ SUMMER 2016 ¡ PROPEL QUARTERLY
Propel Quarterly Summer 2016 - The essential information resource for pub, restaurant & food service operators