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Morning Briefing for pub, restaurant and food wervice operators
Fri 28th Mar 2025 - Friday Opinion
Subjects: A stark silence: the spring statement’s deaf ear to hospitality's cry for help, can people data finally get a seat at the table, small habits big impact, at a time of cost pressure now’s the moment to back data
Authors: Kate Nicholls, Philip Eeles and Abi Dunn, Alastair Scott, Mark Bentley

A stark silence: the spring statement’s deaf ear to hospitality's cry for help by Kate Nicholls

Hospitality business leaders hoping for a last-minute intervention from the government at this week’s spring statement have been left bitterly disappointed. With a looming cost crisis facing the sector this April, the chancellor took to the dispatch box to deliver the first fiscal event of the year and swiftly quelled any hope that our collective, urgent pleas for much-needed support had been heard. 
 
This was not merely a missed opportunity by the chancellor, but a glaring testament to a very real disconnect between stated government aims (growth) and the realities faced by the very businesses powering the UK’s economy. The hospitality industry is the third largest employer in the UK and is renowned for its pivotal role in job creation across all areas of the country, and for its key role in driving economic growth. Yet, instead of a strategic intervention to mitigate the impending financial storm, what we got was a deathly silence. 
 
Our primary request – that we put forward to the chancellor in briefings, face-to-face meetings and engagement with Treasury officials – was to postpone the stultifying changes to employers’ national insurance contributions. The decision to lower the threshold means that from April, more than 750,000 hospitality workers will now fall into the qualifying bracket that will require employers to provide a contribution to their national insurance. This will come at a cost of £3.4bn for the sector, not just this year, but each and every subsequent year. This can only threaten growth and investment, decimate job prospects and undermine the industry’s ability to act as a vital engine to economic recovery. 
 
Incredibly, the government's own analysis paints this very picture. Businesses, facing unprecedented pressure, will be forced to freeze recruitment, reduce staff hours and, ultimately, shed jobs. This will inevitably lead to suppressed wage growth, further exacerbating the economic hardship faced by countless individuals. This has been a drum that we have continued to beat since the policy was announced by the chancellor during last autumn’s Budget, making our concerns very clear to the highest levels in government, including the prime minister, chancellor and numerous secretaries of state. 
 
We have worked tirelessly to make sure your concerns have been captured and communicated, using our platform as the leading trade body for the industry to drive focus on this very issue in the media – from trade press to national TV, radio and newspapers. We have also been continuing to push ahead with our urgent pleas in other areas, notably business rates reform, to provide hospitality businesses with the maximum discount and VAT reform to bring our sector’s contributions in line with our European counterparts. Hospitality’s success has been thwarted by legislative and punitive constraints for too long; it’s high time that businesses across our sector were afforded the economic freedom to develop and grow, bringing about meaningful change to our towns and cities. 
 
Earlier this week, we launched UKHospitality’s Social Productivity Index, a whole new way to measure growth that analyses the social, as well as the economic, impact that a sector can wield. The index underscores the sector’s indispensable role in the government’s commitment to kick-starting economic growth, and has identified that hospitality is the top performing, most socially productive sector in the economy. This provides valuable insight and evidence that the industry is uniquely placed to provide more spaces for people to live, work and invest in. 
 
This speaks volumes and highlights why economic growth should not be the only contributing factor to major policy decisions – it’s vital that the social and geographic impact of our businesses are taken into account. These qualities are not mere aspirations; they are the cornerstones of a fairer, more equitable society – precisely the goals the government purports to champion.
 
The clock is ticking. With April looming, the window for intervention is rapidly closing. The chancellor still possesses the power to avert this impending disaster. To truly demonstrate a commitment to “getting Britain working”, the government must:
• Immediately delay the changes to employers’ national insurance contributions
• Introduce a comprehensive plan for the revitalisation of the high street
• Recognise and actively support the hospitality sector as a crucial driver of economic and social prosperity
 
Failure to act will not only jeopardise the future of countless businesses but will also undermine the very foundations of the UK’s economic recovery. This is not merely about protecting an industry; it’s about safeguarding the livelihoods of millions and ensuring a more equitable and prosperous future for all. The spring statement’s silence must be replaced with decisive action, or the opportunity to build a stronger Britain will be irrevocably lost.
Kate Nicholls is chief executive of UKHospitality 
 

Can people data finally get a seat at the table by Philip Eeles and Abi Dunn 

Following six months of research, 2024 saw The Pineapple Reports’ first four quarters of people benchmarking data published. More than 70 subscribers submitted raw data on people metrics that included turnover, progression, diversity and labour costs.
 
For the first time, people leaders have been armed with the comparative benchmarks they need to highlight successes and rubber stamp their strategy. It’s a game-changer for operators where people budgets are being heavily scrutinised. What have we learnt over the last 12 months? A few thoughts.

• Headlines include overall staff turnover peaking in the third quarter at 79.8%; 90-day turnover peaking in the first quarter, yet remaining static at 30% of new starters; turnover of general managers ending the year at 36%; and only 52% of general managers being promoted internally. Almost 60% of our workforce are Generation Z, while less than 1% are “boomers”. The coffee sector reports the highest labour costs, at 36.3% of turnover, while competitive socialising reports the lowest at 20.1%. The industry overall employee net promoter score has been reported as 54, with the lowest sector, quick service restaurants, at 48. 
 
• We have started to see many interesting correlations. One example being when supervisors were internally promoted, more non-management employees left the business. We know that hospitality is a place where promotion to management can come quickly, particularly for servers showing great customer skills and a strong work ethic. However, the fact that high supervisor progression rates appear to lead to greater overall team turnover would suggest that promotions might have been rushed and/or the development of the core management skills required are being missed.
 
• The use, acknowledgement and skill level around data varies significantly across the sector. Some teams wouldn’t be without it – underpinning strategy, guiding decisions and promoting buy-in to initiatives. But many are in the very early stages of using data and analysis, exposing at times the industry’s history of “gut-feeling” decision making. The good news, however, is that part-taking in data submission has built understanding, highlighted skills gaps and bolstered decision making. This will only improve as we can create more meaningful insights. 
 
• Benchmarks have been a long time coming. Too many times, we have asked people directors their turnover, only for the question to be skirted around. Not because they didn’t know it, but because they didn’t know whether it was any good. For the first time, we can face people data head on and commit to our metrics, knowing that that’s where our work will focus. Of course, we can assume that decreasing turnover improves Ebitda performance, but the really exciting part is building our data sets to understand what the right number is for an organisation – the sweet spot. Hospitality isn’t for everyone, so is it best, for example, to have a certain amount of 90-day turnover? Time, and data, will tell. 
 
• The number of board rooms the report has made it to has been heartwarming for us to watch. Whether it has been used to secure budgets, challenge operations, increase salaries or focus strategy – the list is encouraging. Finally, people teams can sit among the hardcore data suppliers of marketing, finance and operations, knowing they have credible data to make decisions and requests with.  
 
• However impressive and however useful the report has been, all people directors are looking for ways to reduce costs. The most important factor in all this work is, of course, good data. This means increasing our 70 subscribers to hundreds. The way we can guarantee people submitting data is to remove barriers. We highlighted two – cost and submission time. So, like good little data nerds, we removed them. Reducing time to submit to less than two hours and making the report zero cost. For now, this feels like the best way to continue delivering game-changing insights to the sector, at a time when it needs the most. 
 
Hopefully, you share our feelings that we are at the start of a very exciting journey, and admittedly, have a long way to go. But imagine if, as a sector, we could define exactly what people levers to pull to create great culture and increase profitability. But its fair to say that only with the sector collaborating in this way and the work of our data magicians, will we begin to find the answers. 
 
Final thought – a huge thank you to all the supporters of this initiative. From Dishoom to Itsu, from Flat iron to Caravan, from Rosa’s to Clays and from Incipio to the Alchemist (naming only a handful). Everyone who has championed this project for the good of themselves and the industry, we salute you. The future is bright, the future is data.
Philip Eeles and Abi Dunn are co-founders of This.Is.Pineapple, a quarterly people metrics benchmark report for hospitality. Eeles is also co-founder of Honest Burgers while Dunn is founder of recruitment, training and consultancy business Sixty Eight People
 

Small habits big impact by Alastair Scott

Last year, I wrote an article on a few of the habits I wanted to embed in our two village gastropubs. I believe my focus at the time was on trying to implement three specific practices: hellos and goodbyes, never using the word “okay”, and what I refer to as “restaurant eyes”.
 
Now, enough time has passed, and I am pleased to report that the implementation of the first two has gone pretty well. Now, I never (I know, brave word) hear the word “okay” in our pubs. Albeit, admittedly I have heard a few substitutes! Really, what we are trying to get to with this habit is asking open-ended questions – such as “would you like another glass of wine?” or “how is your fish and chips?” – which are much better than asking “are you okay for drinks”, or “is your food okay?”. 
 
The second habit, hellos and goodbyes, has also gotten much better. Earlier this week, I heard the best ‘hello’ in fact. Rachel (who will be reading this) was behind the coffee machine, and she peered out, gave a great “hello” to the guests as they were walking in. I could see how warm and welcome they felt immediately. Good job! 
 
Sadly, however, “mission restaurant eyes” was a complete failure. In truth, this was my fault. My idea of “restaurant eyes” is actually a load of things rolled into one – actively making eye contact, not avoiding eye contact, looking around more, and so on. Perhaps this one was not communicated well enough to the team to enable it to focus on the habit. But two out of three is not too bad, so I will take it. 

So, has all of this work resulted in anything? In all honesty, not everything can be measured and analysed.

While our guest satisfaction scores seem to remain about the same each month – and sales growth, while okay, has not been exceptional – these habits are the right things to do. We also gave each habit a long period to embed, around three months. This made a big difference when it came to sticking, and now we will not have to repeat the same process for some time. If you recall, we based our theory on the 66-day rule to form a habit – we loved it so much we even did a podcast on it! It means that if someone is working five days a week, it is a 13-week implementation.
 
This term, we have added three new habits to focus on, in an attempt to hold onto the previous two and make further progress on our service skills. The new habits are as follows: smiles, “FIFO”, and the four-foot rule. The first, smiles, is pretty self-explanatory. I am pleased to say that a few weeks ago, I gave out one of our “management recognition” tokens to Doruta. She has been with us for a long time, and she gave the best smile on Valentine’s Day that I have ever seen from her. 
 
FIFO, of course, has many meanings. But rather than first in first out, here, it means full in full out. This is trying to get our staff, as they return from anywhere, to look for empties to collect along the way, making us more efficient and touching the guest more often. We are far too good at letting the food runners run food only, rather than picking up empty plates as they return. While we do not give the food runner iPad tills, they can quickly find someone else with an iPad if someone wants another drink or anything else.
 
We have combined this habit with the four-foot rule, which is that you must at least look at the guest if you are within four feet of them and preferably smile and say something. This is a much better first element of “restaurant eyes” as it is more specific for the team as to what it has to do. We will, of course, have arguments about what is four feet, and whether all the staff need to do it as they pass a busy table. But at least it will help deliver “heads up” service rather than trying not to look at the guest in case they ask for something.
 
So, all in all, this is a process that is here to stay. Each term, we will pick the habits we feel we want to drive and try to remain focused on those only for the whole term and then move on to a new one. Even though I am on the old side of the industry, I am still learning to do things better. How I wish I had adopted this decades ago rather than trying to solve everything too fast and ending up solving nothing. Maybe I am not an old dog after all!
Alastair Scott is chief executive of S4labour and owner of Malvern Inns
 

At a time of cost pressure now’s the moment to back data by Mark Bentley

It’s tough out there right now. Many operators entered 2024 hoping for a period of stability after the turbulence of recent years. The pandemic, the cost-of-living crisis and double-digit inflation left deep scars – and while Hospitality Data Insights’ (HDI) price tracking showed signs of inflation easing last year, any hopes of calmer waters were disrupted by a fresh set of headwinds. The autumn statement introduced a raft of cost increases: rises in employers’ national insurance contributions, a lower national insurance threshold, cuts to business rates relief, and increases to the national minimum wage. These are significant pressures.

In this context, the natural reaction for many businesses is to reduce discretionary spend – and unfortunately, insight budgets are often among the first to be squeezed. But I’d argue the opposite approach is needed. If anything, this is the time to invest in insight. Hospitality is – and always will be – a people business. But, as I’ve said before in these pages, I firmly believe the future of hospitality will be increasingly data-led. That doesn’t mean replacing people with algorithms or removing instinct and experience from decision-making. But it does mean combining that experience with robust data to make better, smarter decisions – and to avoid costly mistakes.

Many operators still rely heavily on gut feel. It’s a powerful tool – but it has limits, especially as businesses scale. You simply can’t know everything about every location and every customer. And while time spent in trade is invaluable, it gives you a snapshot – a single moment in time. It won’t tell you where else your customers are spending, how loyal they really are or how their preferences are evolving. That’s where data comes in.

Take card spending data, for example – something we work with every day at HDI. When you’re tracking the actual site-by-site, day-by-day spending of 10.2 million people, you’re no longer guessing. You can identify who your customers are, how you’re performing versus competitors and how the market is shifting – down to individual venues or neighbourhoods. At a time when cost control and resource allocation are so critical, these are the kinds of tools that businesses need in their corner. Let me give a few examples.

Understanding customers

I often ask people: how well do you really know your customers? Not just top-line demographics, but how they live, where else they go and who you’re competing with for share of wallet. Understanding your customers deeply – and knowing if you’re winning with them – is the foundation for effective marketing and brand-building. With the right data, you can track spend, identify brand partnerships that resonate with your audience and make sure your efforts are focused in the right areas.

Pricing

With margins tight, pricing decisions are under the spotlight. Many operators take a flat approach – one price across the board. It’s simple, but it often leaves value on the table. More sophisticated approaches use local market data to assess price sensitivity site-by-site, giving you the confidence to stretch where you can and protect value where you need to. Optimising pricing doesn’t mean abandoning your value-for-money credentials – it means using the data to be smarter.

Location planning

Getting the right offer in the right location is critical. But still today, too many site decisions are made on gut feel. A data-led location strategy – built on real-world customer behaviour – can show you where your core customer lives, works and spends. It can help you avoid the costly mistake of opening the wrong concept in the wrong place. And if you’re a supplier, the same principle applies to route-to-market: get the right brands in the right venues and use data to make it happen.

For suppliers, tools like our Site Universe have transformed how brand owners approach distribution and activations. By scoring outlets based on actual customer behaviour, we can help suppliers focus field sales teams on the most promising prospects. Need to identify the top 1% of outlets in the country to serve as your brand’s shop window? You can do it. Want to find look-a-likes to your best-performing stockists? That’s possible too. It’s not about using more data for the sake of it – it’s about using the right data. Actionable insight is what counts.

I was at the Restaurant Marketer & Innovator Conference in January, and data was everywhere. As James Hacon said, the narrative has moved on from not having enough data. Now, it’s about being sophisticated enough to use it. And I loved the presentation from James Mobbs, who signed up to 100 brand databases and monitored what happened over 175 days. The gaps and missed opportunities were startling – especially in email communications and customer engagement. Michelle Farrell, of Nightcap, summed it up best: “Having data at our fingertips to be able to know if gut feel is right would be my wish for 2025.”

With all the pressures facing our sector, it’s easy to cut data and insight from the budget, but that would be a mistake. Now is the time to double down, because the best decisions – the ones that make the biggest difference – come when you combine great instincts with great data.
Mark Bentley is the business development director of Hospitality Data Insights, provider of card spending insight, pricing and review data to the UK hospitality sector 

 
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