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Morning Briefing for pub, restaurant and food wervice operators

Fri 11th Oct 2024 - Friday Opinion
Subjects: What the new Employment Rights Bill means for hospitality, a winning intersection of technology and genuine hospitality, are youngsters really drinking less alcohol, is a ‘best of breed’ technology stack the right way to go
Authors: Kate Nicholls, Elton Mouna, Glynn Davis, Steven Rolfe

What the new Employment Rights Bill means for hospitality by Kate Nicholls

Unless your radio, TV and all other devices have been turned off for the last 24 hours, you will be aware that the Employment Rights Bill was published yesterday (Thursday, 10 Ocober).

Workers’ rights are something the Labour Party has been clear about its commitment to for a number of years. We know, as we’ve been in talks with them, both in opposition and in government.

Throughout, it’s been eager to engage with us. After all, hospitality is an employer of 3.5 million people, and we are uniquely placed to generate new employment and growth in communities across the UK, given the right circumstances. That’s why we’ve been one of the only trade bodies, of any sector, around the table. 

In every one of these discussions, our key message has been about maintaining flexibility for employers and employees, and we are pleased to see this has been recognised.

However, there will be costs incurred by these changes, of that there is no doubt. We therefore need brave and bold pro-growth measures in the Budget to support us to implement this new legislation. Specifically, changes to the archaic and punitive business rates system – most pressingly, the introduction of a lower, permanent and universal rate for hospitality, to avoid the billion-pound cliff edge in April.

For those of you that are far too busy running your businesses to have had the time to pore over every page of the Bill, let me summarise here, starting with the one that has gained perhaps the most headlines: zero hours contracts.

Figures from the House of Commons Library show that this is the desired way of working for 90% of those on such contracts, and protecting this is essential for businesses and those who actively seek to work in a way that accommodates the reality of their lives as working parents, carers, students and many more with myriad commitments. This is one very clear example where the government has changed policy, moving away from a total ban, as a direct result of our concerns. 

The introduction of “day one rights” has also been in the headlines and is an ongoing concern to a number of sectors, including ours. The plans revealed this week include a pragmatic recognition of the need to make sure the job is a good fit for both employee and employer. A probation period will allow for a “light-touch” dismissal process and is an important way to allow for this assessment to be made by both sides.

The Bill will also change the law to make flexible working the default but recognises this can only work “where practical”, which, of course, we welcome. Pulling a pint, plating up a pudding or doing a turndown service would be difficult to do from home, to say the least! Needless to say, there are a number of areas where we will be working through the detail with the government in consultation with our members. 

Previously, the government has stated its desire to see a requirement for employers to give two weeks’ notice of shiftwork and compensation if it is cancelled less than 48-hours in advance. This poses practical and financial challenges for most in hospitality, but especially the catering and events sectors, and so we will be actively working on practical solutions. 

With the UK having one of the highest minimum wages in the world, we will also be continuing to engage with the government to emphasise the need for caution over the speed of change on youth wage rates in particular, which could damage employment opportunities for young people.

Most of the changes set out in the Employment Rights Bill will come into play until April 2026 at the earliest, and so, our work is not done. We will be using this precious window to press the industry’s case. We will be responding to the various consultations that will now be issued and stressing the need for the government to seize this opportunity to engage with businesses and to take the time to come to the right decisions.

These changes won’t come without cost and have the potential to damage a sector that provides millions of jobs, and some of the most flexible roles in the economy. But by working together, we can ensure legislation is fair and balanced, as we have demonstrated is possible so far.

Hearing from you and showcasing how changes will affect real businesses and diverse groups of workers across the UK will amplify our messages. We are one of the only sector organisations at these crucial meetings, and our concerns are taken very seriously by the government. So, join our network, become a UKHospitality member and wield your influence. In this, your voice is a powerful one. 
Kate Nicholls is chief executive of UKHospitality

A winning intersection of technology and genuine hospitality by Elton Mouna

“At my point in my career, the moment you swap getting out-in-trade for the One Show is the beginning of a gradual decline into becoming a hospitality has-been,” I told Gui Izquierdo, the events manager at Toca Social. I don’t think he was familiar with the One Show, but he nodded in agreement as we chatted over the babble of voices of a Central London networking event. “One of my goals is to continually learn about our sector,” I told him. The goal-related reference was more than intentional but nonetheless appropriate as Toca Social is a unique entertainment venue that combines interactive football-based games with eating, drinking and having a good time.
 
“I would love to have a guided tour of Toca Social,” I told him. With the speed and dexterity of a football referee reaching for a red card, Gui slipped his hand into his jacket pocket and pulled out not a red card, but his business card, and his face lit up as he passed it to me, telling me how absolutely delighted he would be to show me around. A week later, an hour before opening time, I met him at Toca Social in the O2. He bounded down the stairs, shook my hand, and we were off for a tour of a playground for adults. I want to share my observations in two ways – firstly, what I could see and feel and touch, and then, the intangible things.
 
Toca Social is as much a technology company as it is a playground for adults. I learnt about the interactive games, described as “five games, to please both football lovers and haters alike”. Don’t tell Gui – I am football hater at heart, but not when I am playing Atom Splitter or Zombie Attacker. There was the very Instagrammable Early Bath that, of course, I laid in – and have a snap to prove it. It has a three-style menu choice of American, Latin American, and Asian cuisine. I learnt how the rentable spaces can be divided, sub-divided, enlarged and made bespoke to your requirement, however abstract – whatever you want, it bends over backwards to do.
 
Its signage is clever, quirky and funny, including if-you-know-you-know messages like the sign pointing people to the Prawn Sandwich Brigade area (if you don’t know, Sir Keir will tell you). Of course, it has a karaoke booth and a photo booth to snap those happy memories, but it also has a game for four players that looked like Subbuteo on steroids, and brilliantly merchandised premium drinks. And for the sweet-toothed Friday Opinion readers among you, may I draw your attention to Sweet Finish, the area dedicated to desserts. Wonderful stuff, all of it.
 
I don’t underestimate the difficulty of pulling all that together, but what is even more difficult is creating that intangible vibe that was present throughout my visit. It’s a cultural thing – its whole raison d'être is clearly a focus on the customer. Gui made me feel so special, even though he knew I was on a mission to avoid hospitality dinosaur status rather than a genuine customer. I was his focus, and I just know he will make everyone he shows around feel like that.
 
He knows how to make people special and was very proud of what he had to show. He oozed energy – and talking of energy, despite the place being closed, the whole place oozed it. I loved the professional spic and span-ness of the place. It was intriguing. I loved the way the bar staff smiled and waved at me as they readied for opening.
 
And then there was the magical moment when I was being shown an area where the cleaner was doing his magic. The cleaner turned to us and said: “Come on in Gui, no problem, I will do this bit later.” He then wished me a cheery good morning and headed off to make another part of this massive venue spotless. Now, that is hospitality at its very intangible best, don’t you think? That confirms to me it is a cultural thing. 
 
As I left, a story of President John F Kennedy popped into my head. He was visiting NASA, and during his tour, he met a janitor who was carrying a broom down the hallway. JFK casually asked the janitor what he did for NASA, and he replied: “I’m helping put a man on the moon.” If I had asked the cleaner I met what he did for Toca Social, he would have said: “I am helping to take the sales to the moon.”
 
And all of that made me think, if this is the vibe I get when it the venue is shut, imagine the vibe when I return when it’s open. But not tonight, Alex and Roman are on in a couple of minutes!
Elton Mouna coaches middle-managers in the pub industry and is a master practitioner in neuro linguistic programming

Are youngsters really drinking less alcohol by Glynn Davis

Some years back I did some work with Dunnhumby – the data gurus behind the Tesco Clubcard – and it was enlightening to see the massive discrepancies between what people believed they had purchased and what the till data showed they had actually bought.
 
When customers were surveyed, the number of supposed buyers of organic bananas was impressive. But when they were questioned on why they had not bought the organic variety on their last half dozen shopping trips, there was always a reason – they were short of money that week, they were too ripe another week, and they picked up the wrong ones on another occasion. But in their own minds, they were convinced they were good people who did the right thing and always bought organic.
 
This strikes me as having some correlation with the purchase and consumption of alcohol right now, especially among young people. An ongoing deluge of surveys would have us believe they are all on the path to ultimately drinking zero alcohol. As many as 39% of 18 to 24-year-olds claim not to drink alcohol at all, according to YouGov, and while there is now undoubtedly a greater awareness of alcohol in the context of mental health and wellness, I’d question the validity of the responses from this young cohort to such surveys.
 
Sir Tim Martin, chairman of JD Wetherspoon, also recently raised the same question: “If you did a survey saying, ‘how often do you get rat arsed?’ I’m not sure you’d get very many honest replies.” I’m not so sure that would have been the actual phraseology used in the surveys, but the bottom line is Sir Tim says he’s experienced little evidence of younger people drinking less. 
 
This has also been the findings of other operators such as Jonathon Swaine, managing director of pubs at Shepherd Neame, who has suggested at a previous Propel conference that the decline in the consumption of alcohol among younger drinkers is part of a gradual reduction over the past 30-40 years (across all age ranges) but that the current trend is not as marked as commentators would lead us to believe. 
 
At The Alchemist, for instance, in the early months of this year, cocktails represented 67.5% of all alcohol sales, and of this figure, the no-and-low alcohol versions accounted for 3.7%. This compares with 69.5% and 3.1% for 2023, so there has been very little movement in terms of shifts away from the full-fat versions.
 
Meanwhile, The Devonshire in Soho has been generating gargantuan levels of column inches (disclosure: I’m a serial offender), and some of the recent ones have been focused on its sales of draught Guinness 0.0. This is widely regarded as about as good as non-alcoholic beer gets right now, but even that is resulting in just a modest one in 25 barrels of the black stuff sold at The Devonshire.  
 
Maybe it all just makes for feel-good stories that fit the much-desired narrative of people living healthier lifestyles today. Whereas, in reality, on the ground, we are seeing only modest behavioural shifts that fit into the long-term underlying trends that have been in place for many years.
 
What has helped feed the headlines is the array of non-alcoholic products, including Guinness 0.0, which have hit the market. As a judge for some of the leading beer competitions in the UK, I’ve experienced the explosion in the non-alcoholic category, and the quality of the products available today is on another planet when compared with the arid days of Kaliber and Barbican in the 1980s.
 
The story of youngsters moving en masse away from alcohol has also been further burnished by the rise of low-alcohol drinks – especially in the beer category. There has been incredible growth in the sales of such products, which sit at less than 3.5% ABV, with a doubling in volumes between 2022 and 2023 after years of flat sales, according to IWSR. 
 
These figures put the UK at the top of the global table for low-alcohol sales growth, but let’s be clear, this is not about the UK suddenly succumbing to abstemious behaviour. It is predominantly about money. Brewers are reformulating existing beers at a pace to reduce their alcohol levels, and launching new brews below the 3.5% threshold, because the reward is significantly reduced tax burdens. 
 
The adoption of more sensible attitudes towards the consumption of alcohol should be applauded, and it is a sensible younger generation that is leading the charge, but let’s not overplay the trend. This is far from the revolution that many of the headlines and commentators would have us believe and much more of a gradual evolution. Not as many of them are buying organic bananas as they’d have you believe.
Glynn Davis is a leading commentator on retail trends

Is a ‘best of breed’ technology stack the right way to go by Steven Rolfe

I pose the above question as it is one that the Kurve team and I have been hotly discussing recently. Having spent more than 20 years in the hospitality technology industry, I have seen huge shifts and changes, but none as big as the creation and adoption of new technology in the last few years. And it isn’t just the adoption, it’s the knowledge and education about the products that operators have.
 
So, what do I mean by “best of breed”? Put simply, there is so much more technology available now, from hundreds of different suppliers, and I think there is a “best” option within each technology area (loyalty, payment, customer relationship management and kiosks as examples). Now, when I say best, I mean best for your business – depending on your business needs, integrations, customers etc, and in terms of features, experience and innovations.
 
And why does this matter? It matters because as suppliers, we should make building a technology stack easier for our customers. Instead of just suggesting a supplier can “do it all”, it’s realising that analysing needs, pulling skills together, forming strong partnerships and creating the “best of breed” solution for each client is the way to go. 
 
And this rise in technology suppliers is important, because competition is good. Competition drives innovation, quality and performance, and operators and businesses are educating themselves on this so much more now. With the rise of innovation and opportunity comes the need to understand and know what that means for your business. It’s much more likely a customer will come to us now and tell us what they are after, how they want it to work and question how we can do that for them. It’s competitive for the suppliers, but also for our customers – if a rival site down the road is offering self-service, mobile order and pay and online delivery, it’s likely they’ll want to do the same to keep up with their competition. 
 
This push for a “best of breed” technology stack is also coming directly from the brand conscious hospitality businesses, which have been fast technology adopters. They lean on and leverage technology for every customer journey and channel and tend to use one supplier as their “engine”, and then plug other supplier solutions into that. A seamless approach with multiple suppliers.
 
And I feel confident in saying the tide has turned, as modern application programming interface technologies can, and should, talk seamlessly to each other. The technology has been designed to be collaborative, and now us suppliers are taking the lead in developing these partnerships to deliver this “best of breed” approach and solution.
 
What is the alternative? Well, you could choose a supplier that “offers it all”. Many suppliers offer this and will have worked hard to develop their solutions. However, I would always caution that this can sometimes go too far, which leads to a dilution of doing everything well but nothing brilliantly
 
Equally, for some operators, a one-supplier solution is spot on. These operators can choose a supplier that provides the core solutions they need, with integrations that they have already built in and quickly get up and running. This works, and for many Kurve customers, works really well, especially when a business is new and eager to get going or is established and wants to add one main impactful solution (adding kiosks to their existing stack, for example). 
 
However, the point I am making is that, if a supplier’s core business is payment, you want it to be experts at payments – you probably wouldn’t ask it to tag on its own loyalty app and a kiosk machine too (well, I wouldn’t suggest it). And I get it. As a supplier, it is hard sometimes to balance being a specialist with trying to solve all your customers’ needs with your products. That is the challenge that started our discussions originally. We knew we didn’t want to dilute our specialisms, and so our “helping customer develop a best of breed stack” conversation started.
 
If I could give any advice to operators, it would be to challenge your technology suppliers. Question their knowledge and experience for each area of integration you need and discover what they can offer as a solution, who they partner with and how they manage those partnerships to make your life easier. It can be an overwhelming experience exploring technology supplier options, so find one you trust and ask them to help you build your own “best of breed” technology stack. 
 
So, in answer to my own question, I think for many operators, the “best of breed” technology solution is the way to go. It might not be necessary for everyone, but it’s something that I’ll continue to discuss with my team and customers while I look forward to the new technological innovations to come. 
Steven Rolfe is chief executive at self-service technology company Kurve

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