Exploiting the Opportunity for Brand Expansion.
Despite the number of curve balls that have been thrown at the hospitality sector in 2020, UK hospitality is witnessing a radical and fast re-set driven by social, economic, technological and political influences pre and during Covid-19.
British hospitality’s battle to stay relevant and profitable is a fight that pre-ceded Covid-19.
The pandemic has crippled an existing economic pressure bubble and push the sector into the realms of innovation and technology to re-shape how they do things more profitably, at less cost and create new digital guest experiences for new consumer trends.
Independent Hospitality Operators are Embracing Change and Acting Fast
Zia Lucia, GSG Hospitality (formally the Graffiti Spirits Group) and The Jolly Good Pub Company are three Brands who have successfully applied new approaches and technology.
These operators know they need to act fast, drive efficiency and adapt to an increasingly digital native customer. It is a time to think differently to extend their Brand reach and support expansion plans during this turbulent and transformation time.
80% Revenue Growth Achievable Through Change
According to Steven Rolfe, CEO of Kurve, hospitality in the UK has lagged behind retail when it comes to adopting technology to generate new revenue streams, grow profit margin and expand new guesting experiences through digitalisation and innovation.
For these ambitious operators, 2020 has been a time for adaption and innovation to fuel a growth strategy founded on new business models, with some projects already generating revenue increases of 80% between July and October 2020.
“At the start of 2020 there were 88,848 high street restaurants, including pubs (Statista). By July, 12% did not re-open after the first UK lockdown, bringing the number down to approximately 78,000. How many will re-open after the lockdown is yet to be seen but we can expect more liquidations and a general shrinkage particularly in the casual dining market.
“Where there are losers there are also winners. More and more of the surviving operators are turning to digital technologies to not only stay in business but with the goal to expand.
“New business models are sprouting up every month as more venues such as London’s popular pizzeria chain, Zia Lucia, change how they do things and lean on tech to close profit gaps and expand market share through new digital customer experiences created through kiosks, mobile pay and order, smaller unit footprints and a growing and more diverse takeaway market.”
At Graffiti Spirits Group hospitality, technology played a huge role in re-opening its biggest venue Duke Street Food and Drink Market in Liverpool. QR Codes were introduced for the re-opening in July to allow guests to order without the need for human-to-human interaction.
The dishes come directly to tables from all six kitchens to limit people walking around. The new system has been really well received and it cuts labour costs too.
Matt Farrell, Co-Director of GSG Hospitality explains:
“There has been a lot of adaption throughout the industry. In the restaurants we’ve re-opened, we’ve changed the style of service and we’ve invested in technology to simply the new serving techniques and make takeaway and Click and Collect easier for our guests.
“It’s been difficult to change anything at the moment, we’ve had to adapt week by week. It’s very difficult to plan and we’ve had to constantly review our strategies to ensure we’re reaching our target audience and that their experience with us is as normal and enjoyable as possible.”
To Survive and Flourish Demands Change
Farrell can not stress the importance for every hospitality operator who wants to survive and flourish in the new world of hospitality, to focus on change:
“My advice to any operators who are struggling would be not to be scared of change. You never know where adaptation can lead you. Incorporate new methods with old ones; more savvy operators can bring a new type of industry from this uncertain period of time.
“Try to stay focused and positive and streamline your business to give yourself the best chance of coming out the other side”
The Jolly Good Pub Company, East Anglia
For independent pub chain, The Jolly Good Pub Company, continuing to deliver the service and ambiance it is famed for, required not only more focus on how technology could improve profit and revenue, but critically, how to create the theatrics of it’s pub brand in the new environment of social distancing. And at the same time, lay down the foundations for expansion and acquisition.
Thomas West, CEO of The Jolly Good Pub Company explains:
“Our pubs are known for their busy bustling ambience, with crowded bars and cosy seating. Social distancing changed that, so we had to reinvent the theatre we create in the pub. Rather than four deep at the bar, a more European model was adopted.”
Like many food and beverage outlets, The Jolly Good Pub Company has had to apply tactical initiatives to increase their profit margin and accommodate for a halved seating capacity. Such steps have included reducing the labour cost of table service by the introduction of digital ordering through pointOne’s mobile app.
In other areas, the pub chain has reduced menu offerings, stock holdings and made other smaller procedural changes.
Keeping Customers Happy with New Approaches
“Technology has played a key role in these changes. We integrated an online ordering app allowing customers to order at tables reducing labour. This meant we had to retrain the teams to handle other tech-related questions, which proved fun.
“This service was initially difficult to get the customers to buy-in, but once we got the pitch right, our customers appreciated how much quicker it made our service. In one site we integrated a self-service kiosk from pointOne’s partner Kurve. This proved popular with customers who didn’t want to register online. We will be looking at more of these points as the business grows.
“We also extended our use of our pointOne EPoS system allowing us to reduce stock holdings, making savings on the cash tied up in stock. These changes are here to stay and have helped the profitability of the business going forward, reducing wastage across the board.”
“Our integrations with tech have helped reduce the running costs of our business. As many of the trading periods and costs are fragmented at the moment, it’s difficult to quantify and formulate a forecast in such a fluid landscape.”
“Brand loyalty and familiarity between our venues has meant customers can move between the pubs and use the tech easily. In fact, the more mature end of our customer base is determined to learn this technology whether it is a kiosk or online ordering, they like the challenge. This shows that the customer journeys have been well thought out and the intuitive layouts are working.”
What are these Brands doing that others are not?
They are changing what they do and how they do it through new and existing technology investments, analysing product profitability, accommodating new consumer trends and exploring new ways to recreate venue ambiance despite social distancing rules.
Four key questions are constantly being asked:
- Is our hospitality venue still profitable in the current climate?
- What are the short and long-term impact on our guest experience?
- How can we promote customer and sector confidence?
- Will technology now transform the eating out experience?
What the Future Holds
What the future holds for the hospitality industry remains to be seen, but one thing that is almost certain is that some of the changes are here to stay – at least in the short term.
As we push forward in 2021, we can expect to see restaurants and bars innovating more than ever before in a bid to overcome the ongoing and increasingly tough challenges they are facing, creating a ‘new normal’ in how we eat, drink and socialise.
Thomas West, CEO of The Jolly Good Pub Company