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Morning Briefing for pub, restaurant and food wervice operators

Fri 6th Sep 2024 - Friday Opinion
Subjects: Outside smoking ban would take things too far, is sustainability really sustainable, on the right tracks, the effects of summertime on the UK’s foodservice market
Authors: Phil Mellows, Shereen Ritchie, Glynn Davis, Maria Vanifatova

Outside smoking ban would take things too far by Phil Mellows

For the same reason that I’ve never learned to swim – I was a sickly child with a weak chest – I have never smoked. Not even a sneaky puff behind the bike sheds. As a child I felt the allure, the glamour, of casually flourishing a ciggie and blowing smoke rings. I used sweet cigarettes and even owned a cigarette-holder, but I was too scared of what Doctor Banatvala would say if he found out I’d tried the real thing.
 
While my inability to swim did result in one near-drowning incident when I was knocked off the back of a barge, not smoking has been largely beneficial, for which I’m grateful. As I reached adulthood, though, I found myself in a newspaper office where almost everyone chain-smoked, and I got used to working in a noxious fug. And then we’d go down the pub.
 
All day long and most evenings, I was surrounded by smokers. I liked them. They seemed more interesting and amusing than non-smokers, though I don’t know what the scientific basis for that might be.
 
The morning after a particularly long session in a smoky pub, alongside the hangover, I’d be sneezing and coughing as some sort of allergic reaction kicked in. I must have smelt like a smoker, too, though you don’t notice that till somebody tells you. Needless to say, it didn’t stop me drinking beer with my workmates.
 
When you take a long view like this, it’s striking how much has changed. And, I would add, for the better. For years, the hospitality industry battled to stave off threatened anti-smoking legislation by installing ventilation, air cleaning and smoke-free zones, fearing calamity if the government introduced a smoking ban. To no avail. 
 
When, in 2007, the ban arrived in England, Wales and Northern Ireland (Scotland had moved a year earlier) it was grudgingly accepted. With isolated exceptions, there was no rebellion by smokers, nor the trade. Spaces in pub gardens and courtyards were reinvented as “smoking solutions”. “Land-locked” premises suddenly discovered outdoor areas, often by the bins. The licensed trade, as I’ve mentioned before, has a long history of coping with shifting regulation.
 
There are estimates of how many pubs closed as a result of the ban. But it’s hard to be sure, exactly, as at that time, the pressures on business were coming from multiple directions – the 2008 economic crisis, giant pubcos collapsing under the weight of debt and so on. A “perfect storm”, as it was then described. You can’t isolate the smoking ban from those confounding factors.
 
I worried about certain pub-goers whose pleasure, and possibly mental health, derived from sitting quietly over a pint and a cigarette in undemanding company. They, and perhaps others, might have given up on the pub, but we simply can’t be sure about numbers because these are the kind of ordinary people who go uncounted in the surveys.
 
But if you turn that around, you can argue that smoke-free pubs made it possible to attract new audiences, especially as food was becoming more important to the sales mix. And you have to admit that pubs are now more pleasant, cleaner environments. 
 
What if there hadn’t been a smoking ban? Would pubs be more attractive to the modern consumer or less? I suspect that if the law hadn’t happened, the trade would have had to invent it.
 
The latest rumblings from Sir Keir Starmer’s government about banning smoking in pub gardens is a different matter, however. It’s worth noting that the legal foundation for the original ban was to protect pub staff from working in a smoky atmosphere. This time around it’s about creating a “smoke-free society”.
 
This is utopian nonsense. We’ve tried prohibiting drugs, which creates more problems, and it still doesn’t work. Crime is illegal, but it still happens. There are things you just can’t legislate out of existence. An outdoor smoking ban might be the final straw for a few people thinking of quitting, but it will make little impression on a smoking population that is, in any case, already shrinking.
 
And as for protecting an NHS that, according to Sir Keir when asked about the ban, is “on its knees”, how about investing in our health service? It’s another one of those efforts where politicians want to be seen to be “doing something”. And as others have pointed out, it will founder on the rocks of the practicalities of running a pub. Are smokers to be simply pushed out on to the street where they can blow their smoke over random passers-by and generally get in the way?
 
But politicians know nothing of pubs. With honourable exceptions, (Neil Gerrard, my MP when I lived in Walthamstow in the 1990s, was always to be found at the bar of the Village) they don’t go near them. Unless there’s a photo opportunity, of course.
Phil Mellows is a hospitality industry commentator

Is sustainability really sustainable by Shereen Ritchie

As I send my kids back to school after the six-week summer holidays (which, quite frankly, has felt like six years), with Peppa Pig still ringing in my ears, I can’t help but think about a conversation I had with my niece a few weeks ago. As we all sat in a caravan park clubhouse, the entertainment team brought out a chicken in a bucket (not KFC, an actual live chicken in a bucket) and proceeded to pass it around the tables for the children to pet. While I was sat there wondering if I was the only person in the room finding this really quite bizarre, my niece asked me if it was a bit cruel to be parading this poor animal around in a bucket.
 
Once she realised the chicken had been rescued from a battery farm, she quickly came to the conclusion that its life could be worse, and eating cucumber while sat in a bucket wasn’t actually so bad. This then sparked a wider conversation around sustainability within the food system. As I spoke through my own experience with farming and the food supply chain, I listed the positive things I had put in place within businesses, and my niece looked at me and asked: “Yeah, but is that enough? Is it too late? Can we reverse the damage? Is sustainability really sustainable?” As I quietly sat contemplating my answer, I had never felt so accountable for sustainability as I did in that moment.
 
As the weeks passed, this question kept ringing in my head. So much so that I picked the phone up and called my friend David Read – after all, a problem shared is a problem halved, right? Wrong. I left that conversation feeling completely terrified! Did you know that food is the single biggest cause of biodiversity collapse, deforestation and water pollution. In the UK, we have lost 20% of our wild bird population since 1966 (that’s 44 million birds). Some 300,000 species of plant have edible parts but just 20 species account for 90% of the world’s food. Nitrogen run-off from farms creates more than 75% of all eutrophication (raising the pH of water and making it uninhabitable for most species). Globally, 61% of pork, 81% of chicken and 86% of eggs are produced intensively. I could continue, but trust me when I say the stats don’t get better.
 
As we were concluding our frankly quite depressing conversation, we ended the call on a positive note and discussed an upcoming trip that David and his Prestige Purchasing business have planned. I was really surprised to find out there was still a few spaces. In fact, a little perplexed. This year has seen more focus and more people trying to support sustainable changes than ever before. We have seen several inaugural events solely focused on sustainability, so I was puzzled as to why this farm study tour had not sold out. 
 
In four weeks’ time, Prestige Purchasing is doing an overnight study tour. A 36-hour whirlwind journey around some of the most innovative and diverse farms in the country. It will be facilitating operators to see first-hand how different farming methods – from intensive to regenerative, from organic to permaculture – affect the cost, quality, nutrition and environmental impact of the food we serve. Food system experts will give a comprehensive overview of the challenges and opportunities facing the UK’s food industry. The UK farming sector is now transitioning away from the intensive methods used for the past 50 years – delivering less diversity of products and using common standardised processes – to one where innovation abounds, and even intensively managed farms are seeking to reduce inputs and treat the environment with greater respect. They will explain the supply chain mechanics that makes sustainable food more expensive than intensively farmed product and share their knowledge on how they have been able to reduce the “sustainability premium” by up to 80%.
 
I understand the imperative need to deliver Ebitda for our shareholders, a wonderful experience for our guests and great culture for our people. It’s easy to not have the capacity to think about drowning cities, burning forests, plastic choked rivers and starving polar bears. Who wants to think about how in England, just 16% of surface and ground waters meet “good ecological status” and none of our lakes or rivers meet “good chemical” status. Or how in 2022, wild salmon numbers in England and Wales were the lowest on record – it’s horrific! It is also not going away unless we all pull together. I get it. I wake up on Monday, and then an hour later it’s Friday afternoon, but there are ways we can consciously make change. Sustainability is a subject that has such vast coverage, it’s essential we continuously invest time into understanding what we can do. Everyone is starting to realise that making sustainable choices isn’t an either/or situation – you can be sustainable and also save money and add simplicity.
 
Every menu in the country has products from the farming system. As my nana always taught me, knowledge is power. We have more opportunity to gain knowledge than ever before. Please believe me when I say I am not on the Prestige Purchasing payroll! I am not even sure it makes money out of this stuff. I have no personal gain by saying this other than I’d quite like to not live on a dying planet, but if you haven’t thought about going the tour, do take a look. The details are below.
 
Back to the question of is sustainability really sustainable? Sustainability is not sustainable unless everyone does their bit. This means using excuses such as “ignorance is bliss” or “denial is divine” are, unfortunately, long gone. The definition of sustainability is our society’s ability to exist and develop without depleting all of the natural resources needed to live, and unless we take a stand and lead the behaviours we want our children to be proud of, we will fail miserably.
 
The last comment my niece made on the matter was “talk is cheap, and time is ticking”, and she’s right. We are seeing so many boards, investors, leaders and team members all see the value in being sustainable. Environmental, social and governance stats have never been more important to a business as they are now. There is so much positive action happening, we just need to continue on the trajectory of change. In the words of Heraclitus: “I alone cannot change the world, but I can cast a stone across the waters to create many ripples.” Let’s make some waves!
Shereen Ritchie is chief executive at independent bakery brand Buns From Home and former managing director at natural fast-food brand Leon. Details of the Prestige Purchasing Farm Study Tour can be found here.

On the right tracks by Glynn Davis

In 2007, when I was given a tour around the St Pancras station redevelopment by its co-owner, London & Continental Railways, the place was still very much a work in progress, with builders and heavy machinery scattered across the sprawling site working towards hitting the impending opening deadline.
 
With a hefty 8,000 square metres of retail and hospitality space being created, there was much talk about how the station’s offerings would be just as attractive to non-travellers as they would be to those passing through to catch a train – including from the new relocated Eurostar terminal. It was going to be very much reliant on this additional throughput, and I got the feeling that management was talking up the prospects for St Pancras whereas, in reality, it was uncertain about whether it would attract the much-needed ticketless grouping. If we build it, will they come?
 
Jump forward to today, and we can now acknowledge that the people very much did come to St Pancras, and over the years, to other travel hubs across the UK as many of them have enjoyed major overhauls – which have invariably given hospitality and retail much more important roles to play.
 
Travel hubs have now been a bright spot for retail and hospitality for many years. Network Rail recently reported its quarterly figures for January to March 2024, which revealed a 12.6% like-for-like increase over the previous three months at its 19 stations across the UK. In comparison, retail sales over the same quarter increased by only 2% on a like-for-like basis, which highlights both the strength of travel retail, but also, no doubt, the growth seen in food and beverage within these travel hubs. 
 
The influx of new operators is helping fuel this growth. The enormous BrewDog at Waterloo station is one such major addition to this site, but such is the customer appetite/thirst in Waterloo that JD Wetherspoon has this week opened a £2.8m pub very close by the BrewDog. The Lion & Unicorn is just the latest Wetherspoon to hit a station location as it follows its outlet at St Pancras, which took over part of a Marks & Spencer store, and the recently opened pub positioned just outside Euston station.
 
But it’s not all about these giant London-based hubs, which have been enjoying ongoing buoyant sales from rejuvenated hospitality propositions. Independently owned businesses have also enhanced the travel food and beverage landscape. The Head of Steam brand was a true pioneer of station bars under founder Tony Brookes, but when the Sheffield Tap opened in 2009 on platform 1b in the steel city, it arguably set the benchmark for station pubs. It opened in the former Victorian refreshment rooms, thereby taking advantage of some beautiful original architectural features, and the company followed this up with other station bars in York and Harrogate, as well as Euston.
 
On an even smaller scale, The Draughtsman Alehouse sits in the heart of Doncaster station, on platform 3b, and such is its quality offering of beer, hot drinks, cakes and snacks that I’ve been a frequent visitor who has mostly dropped in when not having a train to catch. This behaviour is not uncommon for me nowadays, and I have become a regular customer at The Parcel Yard in King’s Cross as well as the Euston Tap and Doric Arch. A recent trip to Suffolk/Essex also had me visiting the bar at Manningtree station, but the one I’d regard as a must-visit is the Station Buffet Bar on platform 4 at Stalybridge, Greater Manchester.
 
The transient nature of having a pint and a quick bite to eat in a travel hub has always been appealing to me because I like the sense of urgency these locations generate, which translates into a buzz and frisson. But until St Pancras and other major redevelopments cleaned up the existing architecture, improved the offerings and extricated the historical seediness at train stations, they were never going to be mainstream meeting points. They were more about distress visits by a captive audience. 
 
The hesitation that London & Continental Railways and Network Rail had during the redevelopment of St Pancras station in attracting non-travellers as well as ticket holders to retail and hospitality has proven to be unfounded, and its success has undoubtedly provided a pointer for many other major investments. King’s Cross was hot on its heels and has also been a great success. 
 
Whether the growth train can remain on the tracks is uncertain, but what I can be sure about is that I will continue to often choose transport hubs for my food and beverage choices above other locations, irrespective of whether or not I have a ticket in my hands.
Glynn Davis is a leading commentator on retail trends
 

The effects of summertime on the UK’s foodservice market by Maria Vanifatova

Meaningful Vision’s analysis of the UK’s foodservice market reveals the most influential factors driving footfall this summer were more numerous promotions, the Euro 2024 football tournament and the weather – all of which helped offset the negative impact on trade of inflation and rising prices.
 
On a positive note, foodservice price inflation, calculated by studying the change in price over time of a particular menu item, stabilised at 6% after having risen almost 10% at the beginning of the year. However, the number of promotions in the market continues to grow, increasing by 30% in June and July compared with a year ago – a reminder that challenging economic conditions persist, with consumers feeling the pinch and restaurants making a big effort to entice customers.
 
The Office for National Statistics reports the UK’s household saving ratio increased from 7.9% in the first quarter of 2023 to 11.1% in the first quarter of 2024. Against a background of increasing pressure on the cost of living, weakening consumer confidence and slower growth in consumption, it appears UK households are increasingly reluctant to dip into their savings to cover costs.
 
Compared with 2023, the UK foodservice industry saw a modest growth in consumer traffic of 1.2% in June 2024 and 0.5% in July. However, these seemingly unremarkable numbers conceal a more dynamic story, shaped by the influence of international sports events and a spell of good weather.
 
With a busy summer schedule of sport – from tennis at Wimbledon to the Paris Olympic Games – the highlight for industry fortunes was Euro 2024, particularly England’s run to the final. Pubs and bars, traditionally a popular place for football supporters to meet and watch games, experienced a 7% year-on-year increase in visitors during the month-long tournament. 
 
This trend was unevenly distributed across the UK. England, as whole, saw more than 8% growth in visits, but London fell below this nationwide average. Scotland demonstrated the smallest increase, while Northern Ireland and Wales reported the largest growth in footfall. Interestingly, the Republic of Ireland mirrored these trends, with pub visits rising by 7% during tournament matches.
 
While pubs enjoyed a profitable period, casual dining establishments experienced a 4% decline in footfall when compared with the same period in the previous year. This shift suggests people in greater numbers were opting to watch games at home, potentially opting for takeout or delivery instead of dining out.
 
Fast food brands also saw a reduction in the number of in-store visits, although partially offset by an increase in delivery orders from football fans gathering at home to watch matches. Many venues employed special deals, themed menus and food promotions to capitalise on the football frenzy. Notably, official UEFA sponsor Just Eat played a prominent role with enticing promotions like 25% off food and free delivery during England’s match days.
 
The weather also plays an important role in determining the growth or decline in footfall during the summer months. For example, June 2024 was an average of three degrees cooler than 2023, with 5% more rain and with a third less sunny days. July, by contrast, was less rainy than in the previous year, with 10% more sunny days.
 
An analysis of data gathered over the last three years identifies a correlation between the frequency of foodservice visits and the weather, with the number of sunny days in a given month impacting on the bottom line. Pubs benefit greatly from good weather, and among the various formats represented in the panoply of UK foodservice, pubs enjoy the greatest increase in footfall during sunny days. July’s sunshine amplified the effects of the sports events, driving even larger volumes of traffic. Interestingly, fast-food and casual dining restaurants were impacted by weather in the opposite way as they enjoyed more visitors in rainy weather. 
 
The Euros served as a powerful reminder of how events can shape consumer behaviour. The contrasting fortunes of pubs and fast-food delivery with casual dining highlights the importance of strategic marketing initiatives to UK foodservice businesses. Operators looking to benefit from the increased spending generated by sporting contests like Euro 2024 should be well prepared in advance, with targeted promotions, themed menus and new products to drive customer engagement. Deals that are attractive to consumers can help support traffic to restaurants in bad weather, while open terraces allow them to compete with pubs on sunny days.
Maria Vanifatova is a chief executive and founder of Meaningful Vision – provider of pricing, promotion, location and traffic data to the UK foodservice industry. She is a former vice-president and head of European foodservice practice at The NPD Group (now Circana).

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