The announcement by Boris Johnson, earlier this month, that all remaining coronavirus restrictions are to be lifted has prompted hospitality businesses to consider the impact Covid has had – not just just financially, but from an operational and trend perspective.
Hand sanitiser, face masks and social distancing have already been kicked into touch by many operators, but there are likely to be some legacies of Covid that leave a more positive impression on the sector.
JW Lees, the Greater Manchester-based pub operator, is already putting the furniture back where it used to be and getting rid of the greeting points it had.
The business is looking to get back to life as normal – and that includes re-varnishing the tables to get rid of the marks left by bottles of hand sanitiser. “We’re getting the premises match-ready, so to speak,” managing director William Lees-Jones tells MCA.
He says the industry is moving “from a position of jeopardy and survival to looking forward”, and while there are lots of challenges, there are also opportunities and a “lot of optimism out there”.
While social distancing and germ control measures will continue in the kitchen and prep areas, he said the plan for the pub floor was to get back to normal.
“I hate all these screens and stuff that separate people,” he said. “We want people free-flowing, we want people ordering at the bar, we want people to be going to pubs, meeting strangers and becoming friends,” Lees-Jones explains.
For Jens Hofma, chief executive, Pizza Hut Restaurants, the trend-based legacies will be around technology and delivery, with safety measures like hand sanitisation to “fade away” over time.
Around 70% of Pizza Hut’s guests now order and pay on their mobiles – “they are in control of their own time and find it less stressful to order in that way”.
Although 20% of customers “don’t like it at all and would prefer to have table service”, Hofma notes that with cost inflation a growing challenge, and its “reluctance to take up pricing any more than is absolutely necessary”, that element of technology as part of the customer journey is here to stay.
Peter Marks, chairman, Rekom UK – which operates close to 50 bar and nightclub venues – is also optimistic that remnants of safety measures will not remain in the long-term.
While there may well be business that continue to maintain elevated safety measures, Marks suggests they are merely responding to their target audience and what makes business sense for them. Running a business almost exclusively for the under 30s, bar a handful of security staff, managers and DJs at each venue, he does not have the same concerns.
That’s not to say the pandemic has not left a lasting impression on the late-night sector – but it’s been a positive one. It’s experienced “the biggest reset I have seen in my 40 years”.
“I think the changes we have seen in ‘going out’ are here for the foreseeable future… and that is people going to clubs earlier, staying longer and not going out just because there is a deal on,” Marks explains.
“We have seen dwell times up 25%, we have removed the over reliance on discounting, and so have many others in the sector as people have looked to pay down their debts and rebuild their balance sheets, and the customer I think is understanding that we have got to build our business back.”
A tale of two sides
For Hofma, one of the biggest legacies of the pandemic will the unequal footing that some operators have been left on. “Some have been hit hard, others less so. It has been very dependent on the makeup of your business pre-Covid,” he says.
“Neither success nor failure during the Covid period have been entirely deserved. There was an element of luck involved which I think has skewed the competitive dynamics in the sector.
“Those who managed to get through Covid reasonably unharmed have stronger investment capability those who have suffered the most are scrambling to get back onto their feet.”
While Pizza Hut Restaurants was “in the camp of those who lost out” – about 90% of its business pre-Covid was dine-in” – it has the advantage of being a fairly large operator with supportive financial backers, Hofma says. It has also been able to mitigate the impact of the pandemic somewhat by offering deliveries through aggregators and making sure it built a competitive takeaway business.
“We had to go through a CVA to deal with rent arrears, but we are back on our feet - although not necessarily with a full pocket,” he adds.
While some good businesses have gone under due to lack of working capital, on the whole, Williams believes the situation has been a catalyst for the closure of businesses there were less successful. “Hopefully what that means is that there are less restaurants, but better restaurants, and that should help negotiations with landlords,” he says.
A renewed focus
The pandemic offered up a great opportunity for Gaucho and M Restaurants to focus on its employees, chief executive Martin Williams tells MCA. It devised an engagement programme with surveys around diversity and inclusion, and set goals and values based on the findings.
“It gave us an opportunity to really take care of our people – that will be the legacy of the pandemic for us in terms of positive outcomes,” he says.
Although hesitant about implementing it at first, Williams says the introduction of order and pay at table, has been welcomed by staff and guests and hasn’t devalued the ordering experience, therefore it is going to retain this option for guests.
One other significant positive that has come out of the whole experience for Williams is also the improvement to guest loyalty. He believes the projects it undertook to support the NHS and homeless with meals has built up its brand integrity.
In contrast to some of the operators, Williams says he “doesn’t see world where you won’t enter a restaurant and there will not be sanitiser stands”. “We have kept all that, and the privacy screens in the washrooms.”
Like many, the business invested a lot in outside spaces, putting in four new terraces at its restaurants, with Williams believing the trend for al fresco dining is here to stay.
The rise and rise of delivery
Delivery is the other big – and much talked about – trend that is likely to impact the dynamics of the sector for years to come. People have become accustomed to ordering food to be delivered at home on a more regular basis – with the choice of cuisine broader than it’s ever been, Hofma says. But does that mean the future of dine-in is likely to see a terminal decline as a result? He doesn’t believe so.
“The idea of socialising around food has been around for a thousand years – I see it as a basic human need. I think it will continue to exist provided you can offer a dine-in experience that is both affordable but also immensely enjoyable for people. It can’t just be functional.”
Although people have been confined to their homes for large parts of the past two years, Hofma is hopeful that instead being hooked on eating at home and watching Netflix, Covid has taught us that’s not necessarily the optimal everyday situation.
Marks is also very vocal on the importance of people adopting a more active social life, for the benefit of their mental health, and says he has seen an increase in both staff and his guest base struggling with mental health issues over the past two years.
“We need to get back to normal. What nightclubs have always done so well is that they have provided people with those first steps in their adult social life, and it’s really important,” he adds.
Customers have been incredibly tolerant of the various restrictions imposed on venues and the challenges to service standards of staff shortages, but now that businesses are able to trade freely, we are ultimately going to see the return of expectation, says Williams – “and quite rightly so”.
