About a dozen years ago, an intrepid Frenchman called Jacques Borel arrived in the UK, offering his services to redress the tax inequality between pubs and restaurants on the one hand, and supermarkets on the other.

 

He had previously campaigned, with great success, in numerous countries, obtaining large tax reductions for the hospitality industry. Pubs, Jacques said, paid 20% VAT on food sales, whereas supermarkets paid nothing, enabling supermarkets to subsidise the selling price of beer, wine and spirits. The result: an ever-widening price disparity.

 

Indeed, in the previous 40 years, before Jacques’ campaign, pubs’ and clubs’ share of beer volumes, for example, had declined from about 90% to about 50% in the UK. In fact, that decline in market share has continued, as Jacques foresaw, and market share is now about 40%.

 

JD Wetherspoon was right behind Jacques’ campaign, and so were the family brewers. However, revealing a strange and perverse aspect of human nature, most boardrooms of big pubcos remained neutral – and some were actively hostile to the tax equality campaign.

 

For example, I wrote to Rooney Anand, chief executive of Greene King at the time, asking him to support Jacques, but didn’t even receive a reply – even though Wetherspoon was probably Greene King’s biggest customer, as a result of our long-term stocking of Ruddles bitter and Abbot Ale.

 

Ted Tuppen, of Enterprise Inns, possibly the UK’s biggest pub company at the time, was even more hostile – he appeared reluctant to join any club of which Wetherspoon was a member. Even the esteemed then editor of the Morning Advertiser (not the sainted owner of Propel) refused support, stating mysteriously that Jacques was “having a bad game”.

 

Wetherspoon further incurred the wrath of Anand and Tuppen by commissioning formal market research among Greene King and Enterprise tenants – unsurprisingly, more than 90% supported Jacques’ campaign. However, without the vociferous support of the major pubcos, the campaign was doomed to failure, and it duly petered out after a few years.

 

In the absence of tax equality, supermarkets’ share of beer, wine and spirit sales will inevitably continue to increase at the expense of pubs, as Jacques said at the time. However, a second Sword of Damocles, in the guise of far higher labour costs, has further eroded the competitiveness of pubs in the last decade or so. 

 

Today, the average price of a pub pint is £4.98. If we take off VAT and use the labour percentage of Mitchells & Butlers, the biggest managed pub company (35%, I calculate, from its latest annual report), the labour cost per pint for pubs is about £1.45.

 

Therefore, a 10% increase in the labour cost pushes up the price of a pint by about 14.5 pence in a pub. However, labour increases cause far less customer price inflation for the supermarket pint.

 

On the basis of the average pint price being about £1.20 at supermarkets (Carling is £1.08 a pint at Tesco and Abbot Ale is £1.55, according to my arithmetic) and, using Tesco’s much lower labour cost of 11% of sales (the ex-VAT supermarket pint costs £1: labour at 11% = 11p), a 10% increase in labour costs results in  a modest 1.1 pence increase for the customer.

 

And that’s not all – pubs pay far higher business rates, at about 25 pence per pint versus about two pence for supermarkets. This combination of tax inequality and entrenched labour cost increases is an increasingly heavy burden, as the years go by, on pubs, restaurants and the on-trade generally.

 

The conclusion must be that Jacques Borel was right all along. Unless tax inequality is eliminated, pubs and the on-trade will continue to lose market share, as customers react to the widening price gap.

 

Unfortunately, it seems clear that most pubco directors do not understand the basic economics of tax inequality, or, if they do, they simply cannot be bothered to try and redress the balance.

 

In “The Strange Death of the Liberal Party”, George Dangerfield, writing in 1935, reflected on the reasons behind that party’s precipitous decline. Unless pubcos and trade organisations campaign for, and achieve, tax equality, it is likely that a similar book will be written about pubs a century later.

A note before I start. If you’re reading this Friday Opinion in a restaurant, you are exempt from making the hand gestures. I wouldn’t want to cause confusion among the waiting staff.

 

Hands up if you remember Balls Brothers wine bars in the 1980s and their fabulous sandwich counters. Order a roast beef sandwich, and the person making it would grab the most generous handful of rare roast beef from a salver stacked high, and more often than not, the sandwich maker’s hand would dart back in and grab another slice or two, just for good measure. There was a Balls Brothers on the north side of St Paul’s Cathedral, lost to the redevelopers now, but a stone’s throw away at 1 Gresham Street is the first London branch of Sandwich Sandwich, a sandwich shop that reminded me of the Balls Brothers’ very generously filled sandwich glory days.

 

Hands up if you remember the pre-Pret era, when Italian family-run sandwich bars with names like Luigi’s and Giovanni’s ruled the lunchtime roost. They displayed their fillings, piled high on platters in an often slightly rattly, bow-windowed refrigerated counter. The sandwich maker would take your order and then skilfully assemble it to your exact requirement, with dexterity, haste and charm, before popping it into a paper bag, pinching the bag’s top left and top right corners and giving it a panache-filled spin to keep the freshness in. Sandwich Sandwich definitely has that salver-piled-high, old Italian sandwich bar deli vibe, but what it didn’t quite have, when I was there, was that service panache. More on that in a moment.

 

Hands up who remembers Caffè Nero when it was just a fledgling business before it bought Harris+Hoole, Aroma, 200 Degrees, FCB, and probably, by the time you read this, another brand. The reason I mention Nero’s is that when it was an altogether smaller outfit, one of its suppliers was a wonderful east end of London family-run Jewish bakery called Rinkoff’s. For years, Rinkoff’s handmade the muffins for Caffè Nero, only stopping because it couldn’t keep up with increased demand as Nero’s expanded. Well, Rinkoff’s now supplies Sandwich Sandwich with its bread, together with the most wonderful half-croissant, half-donut combo: cronuts. Based just two miles away, I thought it a nice touch picking Rinkoff’s, and what’s that phrase – great minds think alike?

 

If you’re a fan of a doorstep, belly-buster style of sandwich, then Sandwich Sandwich is the place for you. The clever thing is, even though Sandwich Sandwich hasn’t strayed too far from the Italian deli/Balls Brothers choice of fillings and offers (none of your newfangled potato and rosemary sourdough or sea salt focaccia here), the end product is a highly Instagrammable, TikTokable sandwich masterpiece worthy of snapping and sharing online before consuming.

 

So, the sandwiches are good, no doubt about that. And, I forgot to mention earlier, if you’re a flatbread or wrap fan, Sandwich Sandwich has you covered too. But where Sandwich Sandwich could have been better was hand-raising, like they do in Pret when they shout “next customer, please”. When I visited Sandwich Sandwich, the team was concentrating hard, it was diligent, it was good, but it lacked the urgency, speed and the flair of its paper-bag-spinning Italian predecessors, or those freshly out of Pret school. However, it was good to see the really competent, confident team members were helping the shyer, newer-looking recruits.

 

The sandwich sector is no picnic right now. You can get one in Boots or WHSmith, or from home if you’re cozily work-from-home. There are the Young Turks, like Dom’s Subs and Max’s Sandwich, which are full of energy, innovation and belief that they are the best thing since sliced bread. And new entrants like Which Wich and Dave’s are piling in on an already ultra-competitive market that sees Ole & Steen gunning for Gail’s and Gail’s gunning for Pret, and Pret dreaming of the day it will be as big as Subway.

It’s a tough sector, but the queue snaking down Gresham Street suggests Sandwich Sandwich has mastered “sandwich supremacy”, as it says on one of its walls. Uber Eats certainly thinks so, as this time last year, it declared Sandwich Sandwich its Restaurant of the Year and awarded it a hundred grand to help it on its way. And I think too that Sandwich Sandwich has that added ingredient to go far. Hands up if you agree.

“There is no more sombre enemy of good art than the pram in the hall.” So said Cyril Connolly in Enemies of Promise (1938).

Those with nothing better to do continue to debate Connolly’s notion of “the pram in the hall”. Is great art stymied by family life? Won’t the artist scratching away in their garret be distracted by mewling infants? Serious drinkers have raised similar questions. Are pubs that welcome children an obstacle to adult enjoyment? Or is such broad community inclusivity in the spirit of pub-going?

It is, perhaps, a matter of rocking horses for courses? Some operations are set up to handle smaller customers, some aren’t. Yet there are grey areas and great mysteries about the way people use licensed premises. No one, surely, could have planned for the popularity of brewery taprooms among young families. Travelling around, I’ve been struck by the proliferation of the pram in the bar, at least in the daytime.

Parents manoeuvre these vehicles into position with no little skill, and often gather together with others in a kind of sociable pram park. Prams, of course, were bigger in Connolly’s day – huge black carriages that would have blocked all but the grandest hall. Yet the modern buggy, with all its accoutrements, takes up a lot of space, too. 

Somehow it works, despite the proximity of hot brewing vessels. Or is it because of them? The taproom is part of an industrial space. While there are examples that soften the aesthetic of rough, resilient surfaces, taprooms have a toughness about them that suggest a family visit can’t do much damage.

Before covid, there was an organisation called Hops & Tots that arranged brewery tours and taproom sessions for craft beer lovers who had fallen into the family way. It doesn’t appear to have survived the lockdowns, but the generation that attained drinking age ten to 15 years ago has generally not been deterred by parenthood from continuing to pursue an interest in beer in a relaxed, inclusive setting.

Traditionally, of course, dad continued to drink in the pub with his mates while mum stayed home to look after the kids. Thankfully, that’s changing, and mums are now joining them for a beer. When you have two dads or two mums, that makes even more sense.

It’s not a completely new idea, though. George Orwell, in his 1946 essay about his ideal (and non-existent) pub, The Moon Under Water, makes a strong argument for kids in pubs. It’s worth quoting at length because it’s often assumed Orwell was a traditionalist, and that’s not quite the case.

“Many as are the virtues of the Moon Under Water, I think that the garden is its best feature, because it allows whole families to go there instead of mum having to stay at home and mind the baby while dad goes out alone. And though, strictly speaking, they are only allowed in the garden, the children tend to seep into the pub and even to fetch drinks for their parents. This, I believe, is against the law, but it is a law that deserves to be broken, for it is the puritanical nonsense of excluding children, and therefore, to some extent, women, from pubs that has turned these places into mere boozing-shops instead of the family gathering-places that they ought to be.”

While there are aspects of the Moon Under Water that look backwards to some vaguely Victorian establishment, Orwell here seems influenced by a more recent phenomenon, the “improved pubs” that sprang up between the wars.

Brewers such as Whitbread and Barclay Perkins had set out to create a new kind of pub with the family at the heart, offering food and entertainment to dilute the alcohol in the mix. They were hamstrung by licensing laws that banned children from the bar, so they created separate rooms where the family could be together.

The legacy of the children’s room was not a happy one. In my memory, it was a dismal, funless space with a cold linoleum floor for easy cleaning. It was not a warmly welcoming space, and you never really felt you were in the pub.

KAM’s recent report depicts a much-improved scene, with more than 600 million family dining occasions a year taking place in the UK’s hospitality venues. Brewery taprooms don’t appear among the top types of venue listed, perhaps because beer, rather than food, is the main reason to visit (though pizzas are frequently served and could have a bearing on their popularity).

The pram in the brewery bar is certainly a surprise development but a customer-led innovation that should be seen as a cheerful friend, not a sombre enemy, of good beer-drinking.

I don’t come from a hospitality background. I’ve worked in many industries, and having joined Access Hospitality last year, I’m still learning what makes hospitality tick. But what I have learnt is that what makes the hospitality industry special is that everything it does is about building memories. In fact, most people have happy memories of special occasions, and more often than not, that will have been in a hospitality setting of some kind.

 

I firmly believe that hospitality builds the fabric of communities as well as the fabric of the high street. It’s an industry that matters, and it’s a people business first and foremost. But it’s not a business without its challenges, perhaps more so now than ever. The ability to recruit and retain talent is a big part of the hospitality success equation, coupled with the large proportion of costs that are tied up in energy and food. Recent increases in those costs have really had an impact. 

 

Hospitality is also a business whose customers’ habits have undergone rapid change. Covid and the impact of the lockdown prompted a big change in customer behaviour, followed by a boom where everyone was eating and drinking out again. Now, with rises in the cost of living, customer habits have changed again. There’s also been demographic changes, such as young people drinking less, people going out at different times of the day and more people working from home so less after-work socialising – as well as more people going out on less traditional days of the week. We could argue that how people live their lives presents itself first within the hospitality industry.

 

As a technology business, we have a close relationship with our customers by talking to them and understanding what they are doing and the issues they are facing. At Access, we have a very broad range of technology products, giving us a fairly accurate picture of how the market is changing and evolving, and to a certain extent, we are able to predict how it will continue to evolve. 

 

Two years ago, artificial intelligence (AI) wasn’t nearly as prevalent as it is today in the technology world. The potential of AI in a hospitality setting is immense, but how we use it and apply it to make people’s lives easier is more challenging. Many of the issues faced by the hospitality sector revolve around how to improve productivity, and while people are operators’ greatest assets, they’re also the biggest cost, and right now, recruitment and retention is difficult. 

 

There’s a massive opportunity for technology to play a role here, without losing sight of what makes the industry special. How we make people more productive is an issue that AI has been intrinsically developed to solve. AI comes into its own where there is a platform and data, such as forward bookings data feeding into staff scheduling data. We can then make scheduling decisions with the AI capability and forecast demand based on reservation data. This becomes even more powerful if that is connected to a customer relationship management system, where AI can be used to power marketing campaigns based on the scheduling and the reservations data.

 

People talk about untangling the technology, which is what the hospitality sector often feels about technology. It wants the best-in-class software for each application, but it also wants help with the integration. Unpicking this problem is huge. We can take the Apple approach, where products only work with other Apple products. Or we can take the Android approach, with an eco-system where customers can pick and mix what’s wanted and it all works together. At Access, we’re about offering the eco system, from which customers can then choose what they want. We want to give them that flexibility.

 

Sometimes, technology does need simplifying. Customers often talk about wanting this feature and that function, but sometimes, not having all the bells and whistles is the easiest thing to implement and the quickest to train staff to use, so customers get a return on their investment quicker and more people are able to use it. Complex technology isn’t necessarily the best option.

 

Often, if a company’s processes change or its management changes, the technology that was implemented previously doesn’t then fit with the new regime. In-product training prompts, with bite-sized tips or links to short “how-to” videos, potentially implemented through AI, would help circumnavigate this – enabling new teams to get to grips with the technology, giving it a longevity it might otherwise not have. 

 

We’re not far off a time when ordering technology will send an alert if particular products are running low, generate the order based on stock levels, menus and forward bookings, and then place the order. This is real progress, saving staff valuable time that can be spent elsewhere.

 

AI will allow businesses to change their processes, and for the technology to be able to adapt. It’s a paradigm shift, and it’s hugely exciting, but it’s important to remember that hospitality must still be about making happy memories for customers – but creating them in an efficient way for the business.