Anyone who expected England’s pub and restaurant market to spring miraculously back to life all flags flying on the Fourth of July hadn’t read the programme notes.
All the data pointed to a sedate reopening. Only just over half of operators said they would be opening even some of their sites. In the end just 45% of pubs and bars welcomed customers back.
Consumers too had made it clear throughout lockdown that they were nervous about returning, with only about 20% raring to go no matter what, 20% not going anywhere and the rest needing active encouragement. Pick your survey; they all said just about the same thing.
And if you wanted a real life example of what reopening might look like, you only had to look at the experience of the US. States there began reopening bars and restaurant during May, and sites that were trading after a couple of weeks were reporting sales at around 54% of pre-coronavirus levels, according to data from Nielsen CGA, CGA’s Chicago-based research business.
Some states like Texas did better, recording trading at 68% of their pre-coronavirus norm a fortnight after opening for inside eating and drinking, and looking at week-on-week increases of 20% to 30%.
So by that measure any operator this side of the Atlantic that hit 50% of normal sales on their first weekend back should justifiably feel pretty satisfied, and if as reported some reached as high as 80%, they might even treat themselves to a celebratory tipple.
With little or no trouble reported, and A&Es not over-run with drunks, a subdued couple of days was a good result all round for the industry.
But as the US has also shown, it is likely to be a long and probably rocky road back to market health and profitability. We all know what’s been happening in Texas and Florida, and now California.
Fear of new coronavirus outbreaks is real. It doesn’t matter what we individually feel about the wisdom of new lockdowns, local or national, it’s what the wider public, our customers, think that’s important.
Numbers of confirmed cases, and deaths, continue downwards in the UK, but the surge in new cases across much of the south of the United States has put a brake on the recovery of the out-of-home market there. Sales growth nationally has slowed and gone into reverse in some states such as Texas as restrictions on trading have been re-imposed.
Latest Nielsen CGA data show that at a national level sales in bars and restaurants that were open were only 10% down on the pre-coronavirus norm in the week to June 27, representing a +220% increase on March 28 when shutdown started. However, in Florida, sales were flat after weeks of growth and in Texas sales dropped by -4% , and that was before new restrictions kicked in.
Texas governor Greg Abbott has now closed all bars and establishments with more than 51% of sales from alcohol apart for delivery and take-out. Restaurants have remained open for dine-in, but at no more than 50% capacity.
Florida Governor Ron DeSantis ordered a similar bar shutdown, and pointed the finger of blame squarely at the bar market: “If folks just follow the guidelines, we’re going to be in good shape. When you depart from that, then it becomes problematic.”
The message to on-lookers this side of the pond is pretty clear. Doing everything to mitigate the chance of a spike in infections here should be front-of-mind for all hospitality operators.
Arguments continue over the level of hygiene and safety measures that customers will expect and whether ‘over doing it’, with say masks for staff, will ruin the experience for them. Research shows that consumers overwhelmingly want to be reassured – and satisfaction ratings from the parts of the US where restaurants and bars have already opened show a strong correlation between satisfaction with hygiene and safety and marks for overall experience. But we also know there are some customers that are kicking back against the new protocols.
That judgement will be down to individual operators, but being extra cautious might be advisable at least to start with, and then adjust to what the customers say. Minimising risk seems a sensible approach.
A common narrative both sides of the Atlantic is that city centres are in for a particularly tough time, and evidence from the States is that major cities have performed, and continue to perform, below the rest of their respective states. With business travel and commuting still heavily restricted along with large events and late night occasions, city centres are having a difficult time.
In Texas, before the latest clampdown, sales remained constant at -13% below pre-coronavirus norms over much of June. However, in Dallas, for example, the last two reported weeks saw sales drop by -4% and -10% to June 20 and 27, respectively. Just before the second bar shut-down sales stood at 58% below pre-coronavirus norms. The city is suffering again.
What has helped US operators through the worst of lockdown has been the partial cushion that take-out and delivery has provided. When lockdown first hit, overall sales fell by 80%, but grew steadily without in-store dining as casual dining and bar operators, as well as QSRs, upped their take-out and delivery activity making the most of collaborative promotions like the Great American Take-out campaign and reformatting stores.
The classic US drive-thru is now being reimagined with license plate recognition and other tech solutions making for an even smoother, efficient experience.
There is an argument, and it is contentious, that the US market has had to work harder without the Government support that the UK and other European countries have received. It has certainly been inventive and adaptable – even Chick-fil-A has moved into the meal kit market. It has perhaps also been more accepting of the thought that the eating and drinking out model will have to change.
As Yavuz Pehlivanlar, COO of the Miami-based 50Eggs group, which runs the Yardbird and Spring Chicken brands, said on a recent Atlantic Club webinar face-to-face interaction had to move online: “I think digital is the way to go… we need to reinvent the consumer experience.”
And as US menu maven Nancy Kruse observed on the same panel: “Pivoting is the buzzword of the era… we’ve seen an extraordinary upturn in creativity.”
Then again the US has suffered setbacks, including business failures, too. The pandemic has been a global phenomenon and affected hospitality worldwide. As the sector gets back on its feet around the globe there are clearly lessons to learn, successes to emulate and mistakes to avoid. Most markets are ahead of the UK on the path to recovery – so it’s probably worth looking up from time to time to see where the routes chosen by our international friends and colleagues have taken them. We should take time to read their notes.
Peter Martin: A global problem requires a global perspective
Anyone who expected England’s pub and restaurant market to spring miraculously back to life all flags flying on the Fourth of July hadn’t read the programme notes. All the data pointed to a sedate reopening. Only just over half of operators said they would be opening even some of their sites. In the end just 45% of pubs and bars welcomed customers back.