I am struggling to understand how the new government says it wants to encourage growth on the one hand while failing to rule out capital gains tax (CGT) rises on the other. We have so many founder clients that have taken huge risks, shunned lucrative salaried careers, put their house on the line, given personal guarantees, lived in cramped domestic situations and so on – all in order to save costs, create, build and ultimately try to exit from a hospitality business.

 

These businesses are risky. They regularly fail. The margins are not high at the best of times. Generating 10% Ebitda from every pound generated these days is a success given lingering covid loans, deferred VAT bills, the loss of labour force post-Brexit, business rates, crippling energy costs, food cost inflation and interest rates in double digits. I wonder why anyone would take the risks. 

 

The one advantage that many saw as making the risk worthy is the fact that if you were one of the few that made it out and got some cash off the table (despite not having a pay rise for a decade), you could keep 80% of it. That seemed to me like a fair return for risking literally everything. You certainly don’t get a tax break for going out backwards and declaring bankruptcy. If we want growth, we need a policy that will encourage folks to continue to shun big, safe jobs and take these risks.

 

Never forget that in the meantime, hospitality businesses create a massive number of jobs, collect billions in PAYE and VAT revenues for the government, pay business rates and pay corporations tax on profits. Every business created creates wealth for society. We need more, not less. Moving CGT to 45% feels like a massive penalty on growth.

 

At the very least, if you are going to tax capital gains, don’t apply it retrospectively. If most of your gain was earned prior to September 2024 (if that is when change happens), why not apply the current rate of 20% to those gains and tax gains going forward at a higher rate? That would be fairer.

 

Why not do what they do in Australia and say you can have 50% of your gain tax free and pay a modest percentage of tax on the balance, depending on how long you spent building the said gain? One thing to think about though is if you tax gains on a business sale at the same rate you tax income, who in the next generation will shun safe, salaried positions to take the risks we need to grow the economy to ultimately reduce the tax burden? I think we need to start talking about this more before we sleepwalk into a black hole.

Albert’s Schloss recently opened its doors in London’s Shaftesbury Avenue to reveal an impressively fitted-out space that will be home to much late-night revelry, involving copious quantities of German lager and dancing on tables to Bavarian Oompah bands and other cheekier entertainments.

 

But my next visit will be at 9am, alcohol-free, and likely involve a Kroissant Royale comprising slow-cooked onions, Gouda, Burford Brown fried egg, crispy shallots, chives and curry ketchup. All washed down with a cappuccino. 

 

It is yet another hospitality venue that has embraced breakfast as part of its model and acknowledged that it represents an increasingly important daypart. It is also among a growing number of establishments that would not have been seen as obvious candidates for the provision of breakfast, but they are jumping into this growing market. 

 

On my travels in recent months, I’ve enjoyed pastries and muffins at The Wigmore pub adjoining the Langham hotel that recently introduced a breakfast menu, and strolling through Mayfair, I passed The Barley Mow – part of Cubitt House – where an A-board had been parked on the pavement outside the pub advertising “breakfast Monday to Friday 8am to 10:45am”. Hours that are just ahead of the traditional pint-pulling time.

 

Another unlikely contender is Wagamama, which is launching a breakfast/brunch menu at 22 of its restaurants a decade after it first tentatively tried its hand at a morning proposition. The mix of chicken katsu waffles and morning baos might not have gone down so well in the mid-2010s, but I reckon we are much more primed for a broader, more globe-trotting breakfast menu today. 

 

The forthcoming Spanish restaurant from José Pizarro will offer breakfast from 8am and include a range of devilled eggs and a “Bikini” sandwich comprising cheese, Jamon 5J and truffle, along with more ubiquitous pastries. We also have Prezzo launching its first morning menu, which includes a Breakfast Pizzulata – a calzone containing egg, egg and sausage, egg and bacon, or egg and avocado.

 

Evidence of the breakfast trend was seen by my visit to the smart Hide restaurant in Mayfair, which had originally only opened the ground floor in the mornings, but such has been demand that it now caters for up to 350 covers some mornings across the ground and first floors. It was here in a seat overlooking Piccadilly and Green Park that I enjoyed a Croque Monsieur, washed down with a glass of sparkling wine. 

 

My travels have also recently taken me to Fallow, for its Royale croissant rolls, and to Nessa Soho, for its signature muffins, with both venues doing good trade. The latter dish, with sausage and egg, was an upmarket take on the McDonald’s variant that has become a staple of many people’s morning routines. So much so, in fact, that the burger brand had for many years been the market leader in out-of-home breakfast occasions in the UK, according to Lumina Intelligence. 

 

The potential for growth in breakfast has just been recognised by McDonald’s rival, Wendy’s, which in the US has stated that it currently earns about $3,000 per week per store – equating to around 7.5% of sales – and its goal is to double this number. Its chief executive suggests it is more profitable than other dayparts, is incremental to the business, and also leverages the restaurant’s labour model.

 

Back in the UK, McDonald’s was overtaken in late 2021 by Greggs, with its near-25% breakfast market share, which highlights that there is certainly price sensitivity around breakfast, especially when it is part of a daily routine. This will very much be the case for the more cost-conscious younger demographic, but they are also susceptible to the phenomenon of Instagram-fuelled dishes. These can drive Generation Zers into a frenzy for specific dishes, as long as they have the necessary viral visual appeal. They also, invariably, come with corresponding premium price-tags. 

 

Demand across all age ranges has led sales of breakfast out-of-home to rise since covid-19, with it accounting for 4.1% of out-of-home occasions in 2022, according to Lumina Intelligence. Although this is a hefty jump on the 3.5% recorded in 2021, we are clearly talking small percentages here. However, despite inflation on food and other costs pushing up menu prices, the direction of travel for breakfast is obvious, and expectations are that the ongoing increase in numbers of people returning to offices will help to further fuel this trend.

 

There is undoubtedly an opportunity for operators of all colours and persuasions to at least investigate the breakfast market, and we have seen many more establishments introducing all-day menus that incorporate breakfast offerings, as well as the introduction of hybrid dishes that include the likes of burgers and fries, which have been seen as non-traditional morning fare – doff of the cap to Dishoom for its menu-bending Bacon Naan Roll for getting the ball rolling. 

 

I’m all for this breaking out of historical norms, but even I’m not sure that I’d be up for a traditional Germanic pork knuckle with my cappuccino first thing in a morning at Albert’s Schloss, were it to up the ante in the breakfast stakes.

We have recently introduced iPad tills into our pubs, at long last. Many of you are probably, and rightly, laughing because you did this ages ago. In fact, I have many unhappy memories of trialling mobile tills 15 years ago, at the Trout in Oxford, when Gavin Smith, now managing director of Pizza Pilgrims, was the manager. Back then, the theory was great, but the practice was awful. The screens weren’t powerful enough to be used in the sunshine, the configuration was so poor that staff abandoned them for the old tills, and they would drop in and out just when you needed them most – especially in the garden.

 

Fast forward to today, and I am really happy to say that all these problems are now solved. There are two significant reasons to adopt iPad tills, if you haven’t already. The first is efficiency. Our measurements show a 15% increase in front-of-house efficiency from not having to take the order twice (once from the customer and once into the till) and from reducing unnecessary walking. This efficiency alone will save us a team member on busy shifts and allow for many more slack tasks to be undertaken during quieter shifts. 

 

The other big benefit of iPad tills is the positive impact on shift planning. This move allows our best team members to stay focused on serving guests, manage larger sections, and be supported by food runners and bussers who can also take orders. Our old shift planning methods need to be revamped entirely. Investing in new technology like this offers a fantastic opportunity to place the right people in the right roles, ensuring our top team members are front and centre, smiling and delivering the best possible experience for our customers.

 

Our team members who are less adept at smiling or engaging with guests are being moved to supporting roles. This ensures that those in direct contact with our customers are the most engaging and personable. I like this hierarchy as it creates an incentive for those who don't naturally smile or engage to improve these skills, if they aspire to the top front-of-house positions. We encourage all team members to elevate their customer service abilities. Those who may initially find themselves in supporting roles now have a clear pathway for growth and development within the business. 

 

The implementation of iPad tills has completely changed our service capabilities, especially in previously challenging areas like the garden, which were too far away. Drinks can keep flowing all day, and the adage that people should only get up to go to the toilet or to leave can really happen. We have been given the opportunity to be more “on it” than we have ever been.

 

It is too early for us to know the exact uplift in second drinks and upsells, but initial evidence suggests that this might be in the order of 10%. If so, this is massive. Even 5% on our turnover would be amazing. That £70,000 of extra sales would be another £45,000 of profit – hardly a number to be sneezed at. 

 

It wasn’t long ago that I attended a conference where I spoke about my biggest mistakes as an operator. Ironically, I emphasised how my regrets often stemmed from opportunities I didn’t seize, rather than the actions I took. Now, I would certainly add iPad tills to that list. Having tried and failed 15 years ago, I now realise I should not have given up for this long. The implementation and adoption were so much easier than we all expected, and I really believe the results will flow through much faster too. 

 

The journey to modernise our operations has been a learning experience, but the rewards have proven to be well worth the effort. The transition to iPad tills is a testament to how embracing new technology can address long-standing issues and propel us towards a more efficient future. I am excited to see the continued positive impact on our business and am confident that we are now better equipped than ever to provide an outstanding service for our guests.