Jon Midmer of global executive search firm JMA gives his view on the past year in recruitment and what to expect in 2019. He discusses the trend for hospitality executives heading to the leisure sector and the leadership qualities that are likely to come to the fore in 2019.

As another year draws to a close, I await with interest to see how 2019 will unfold in terms of the industry and people developments in the eating and drinking-out sector. Uneventful is certainly not a word I would use to describe 2018, and I doubt that it will be for the coming year, either.

For those who have focused on quality and innovation, kept investing during 2018, and been efficient while they’ve done it, life won’t look that bad. There also remains considerable opportunity in food to go, pre-ordering, click and collect, delivery, new formats, partnerships, tie-ups, concessions and, of course, the international and steadily growing ‘captive travel’ markets. For the brave, there are also now some great property deals to be had.

Movers and shakers

This year saw some eye-catching acquisitions, including JAB’s £1.5bn takeover of Pret A Manger, the sale of Costa to the Coca-Cola Company for £3.9bn (to complete in the first half of 2019), and the audacious £559m swoop on Wagamama by TRG. It will be interesting to see how Pret recovers from its troubles and recent negative press, how Costa gets used to owners in Atlanta rather than Dunstable, and how Wagamama trades under new ownership.

As the leader of a hospitality-focused executive search firm, unsurprisingly my main interest is the industry ‘movers and shakers’. This year, looking stateside, it will be interesting to see how Starbucks will fare without Howard Schultz’s guiding hand and what changes Brian Niccol will effect at the recovering Chipotle. At Yum! Brands, Tony Lowings takes over from Roger Eaton as chief executive of KFC and Vipul Chawla takes over from Milind Pant as president of the International division at Pizza Hut.

Closer to home, we await with interest where Jane Holbrook will surface postWagamama, and if anything will change at SSP when Simon Smith takes over from Kate Swann. We also look forward to seeing who will replace Rooney Anand at Greene King, while he takes over from Martin Robinson as chair of Casual Dining Group.

Heading for the leisure sector

The trend we’ve observed in the past few years is hospitality executives heading to the leisure sector. Lance Batchelor left Domino’s to go to Saga, while Alan Morgan checked out of Spirit to join Rank. Duncan Garrood left Bill’s to join bowling business Ten Entertainment, and the Paul Flaum-led Bourne Leisure appointed John Hendry-Pickup from Prezzo and Peter Blake from Greene King. We saw the same migratory trend in the non-executive director space: Jennelle Tilling, former Global CMO at KFC, was snapped up as an NED at Camelot, and Ivan Schofield, who admittedly retains his ties with the QSR and casual-dining industries in both the UK and France, is now an NED at Hollywood Bowl.

Why so many heading for the exit? For one, maybe because it’s heavier going than it has been for many years? Another reason behind leisure players hiring casual-dining, pub and fast-food executives might be that these days you can’t have a great leisure experience without a compelling and well-executed F&B offer. For this reason, in the cinema sector, for example, last year we saw Empire launch Tivoli, a luxury cinema, café and bar concept, and Everyman’s F&B spend rise by 8%.

Tough appointments

In parallel, food-led hospitality players have realised that, however great your menu, you need a great leisure experience to go with it, be that in store or online. Perhaps for this reason, in the past few years, Will StrattonMorris, formerly of IHG, Disney and British Airways, was hired at Caffè Nero, and Andy McCue of Paddy Power and Dominic Paul of Royal Caribbean were appointed to lead The Restaurant Group and Costa respectively. Given where we are in the cycle, I suspect both have found it tough.

Any predictions for 2019? A chief executive I had breakfast with at the end of last year, whose opinion I highly respect, summed it up well when he said it will be a year for “doing what you have to do, before you do what you want to do”. I can’t believe that this sentiment won’t be shared by a good many. While it will undoubtedly be another year of significant challenges, as much as I have sympathy for those who are struggling, I cannot help thinking that the majority of problems (including but not limited to ill-thought-through expansion, a lack of investment in quality and brand, the failure to rise to the challenges posed by delivery and digital, poor leadership and over-leverage) have been self-inflicted.

Leadership quality

Were they not, we would not be witnessing the continued outperformance from the likes of Nando’s, McDonald’s, Greggs, Wetherspoon and Wagamama in the big league and Loungers, Dishoom, Caravan, Honest in the all-comers category. I know for a fact that all these businesses are consumer-first, have differentiated propositions, provide good value and excitement, and are well run by great leaders. I predict that these operators, and their leaders, will continue to enhance their reputations.

On the subject of leadership, Paula MacKenzie, GM of KFC UKI, one of the brightest stars in the industry, in an interview last year summed the concept up brilliantly in three words: “People and strategy”. I would argue that next year, potentially even more so than this, the very best leaders will need to get both of these elements right to succeed. Of course, great execution is imperative to keep customers coming back for more.

In 2019, therefore, conditions in the sector have seldom been tougher, nor has distinguishing yourself as an operator, or a leader, been harder. However, for those with the stomach for it, doesn’t this surely make next year a supremely exciting challenge for those who wish to excel in tough times?

■ Jon Midmer is managing director of JMA, a global executive search firm specialising in the hospitality and retail industries