As the hospitality sector comes to the end of another year filled with unprecedented challenges, we ask sector leaders to share their highs and lows of 2022 and hopes for the New Year, in a special series of articles this week. Part 2 includes comments from Steve Holmes of the Azzurri Group, Phil Urban of Mitchells & Butlers and Will Stratton-Morris of Caffè Nero UK

Steve Holmes, chief executive, Azzurri Group

Reflections on the past 12 months: “From an Azzurri perspective, it’s been a fairly positive year as we returned to growth on both the prior year and pre-Covid. We have continued to evolve our brands to reflect this post Covid world and step changed our digital capabilities considerably.

“It has not been without its challenges, clearly, as we have been operating in a very high inflationary environment and a cost-of-living squeeze that has dampened consumer demand. It’s been a year where we have focussed on the basics of what we deliver to the customer to ensure solid brand and economic foundations as we enter 2023.

Hopes for the year ahead: “2023 is a big unknown. The start has every chance of being particularly miserable and challenging as credit bills land, energy bills increase again, and people think about re-mortgaging. However, I am optimistic that inflation will fall later in the year easing both the pressure on the consumer and business, and we will be enjoying an accelerated ongoing recovery in demand as we enter the summer.”

Will Stratton-Morris, CEO, Caffè Nero UK

Highs and lows of 2022: “For the UK business, it’s been hugely pleasing to see our sales pass pre-pandemic levels. We are currently trading at over 107% of 2019 levels, which is due to both store sales and the growth of our delivery and coffee at home channels.

“Even though the later part of 2022 has seen a challenging trading environment due to significant inflation costs, energy and labour, the recovery and performance of the business is a testament to the strength of the brand and the loyalty of our customers, who now also want our products in their homes.”

Hopes for the coming year: “Heading into the new year there is a mixture of strong optimism and wait and see. In the UK we have resumed a strong store opening programme and we will look to capitalise on the brand partnerships we have recently announced, including ‘3’, Deliveroo and our exciting strategic partnership with Waitrose.

“There is huge potential with that. The UK is obviously a challenging market with all the costs bearing down on the business and we haven’t seen the full impact of the cost of living crisis on customers yet and how that impacts spending habits and behaviour. But I feel really positive about how Caffe Nero enters 2023 and I think we can build on our positive sales position and are well set to have a strong 2023.”

Phil Urban, chief executive, Mitchells & Butlers

Highs and lows of 2022: “I would say it’s the toughest year I’ve ever known in my career and for this industry. And particularly when I think of my general managers, from the beginning of our last financial year in September 2021, we went from being full of optimism to being hit by Omicron and all the Christmas bookings going out the window, to delivery and people issues, and then to have the strikes over the summer. For a general manager it’s been hugely difficult and there have been loads of low points in all that. But I suppose the high point is just how resilient people are, and people bounce back and are professional, and they care, and they want the business to do well.

“I’m blessed with a really strong team, so that’s a high point for sure, but we’re not out of the woods yet. As a sector this is another tough year. Utility costs are horrible, but it won’t be forever, and when they do normalise, we intend to be there and be strong and bounce back quickly.”

Optimism about the year ahead: “In our numbers there are a few things that make me feel a little bit more optimistic. There is evidence that people are venturing back after Covid, so some of the people we haven’t seen for a long time – the old boy with his pint in the afternoon – are now coming out again. And there’s still more people to come back.

“We didn’t have a Christmas last year, and even with the strikes we’ll have a strong Christmas, so that’s super helpful.

“And there are our guest review scores, which are critical. There’s a correlation to them and like-for-like sales, and our guest review scores are at an all-time high, so we’re really pleased with that.

“And lastly, last year we achieved what we did with a huge of people issues and missing team members or inexperienced teams. The fact is, a year on, we’ve still got some people problems, but we are light years away from where we were a year ago, so that would tell me that we should better than we did last year, in the new year.”