Time to hold your nerve

They say that no-one ever saved their way out of a recession. Even so, there will be plenty of pressure heaped on companies to cut their costs as the economic news worsens. We may not actually be in a full-blown recession and the eating-out market may be standing up remarkably well to the consumer squeeze, but the signs are that things are not going to get any better any time soon. Planning for tougher times makes perfect sense. But how to plan is the question? If you take your lead from the City you will already be preparing for wholesale redundancies. Investors and their non-executive directors will no doubt be demanding that businesses batten down the hatches and look hard at reducing their cost base. It’s always sensible not to spend on non-essentials, but do people really believe that serving up a cut-down product for the consumer is actually going to make them happy in already gloomy times? Reducing quality and service levels make look good on paper, but try selling it to the public. When times are tight, people expect even better value, a better experience and a better night-out for their cash. That’s the real challenge for the hospitality sector. Good operators will hold their nerve and continue to invest, and history shows they are likely to be the ones that will come out the other side in the best shape. As Robert Cook, chief executive of the Malmaison and Hotel du Vin group, said in the latest edition of Director magazine: “To spend less on new products or not to spend to keep the product looking great would be foolish. If this is a recession I want to come out of it looking better than anyone else.” Consumers will become more discerning when money becomes tight. It’s the time to give them something new and exciting. As serial restaurant investor John Barnes said last week: “With so little innovation in the market at the moment, it’s a very good time to be launching something new.” With their customary enthusiastic drive and optimism, Barnes and former La Tasca colleague James Horler are currently busy rolling out new sites for their newly acquired Ego Restaurants chain across the North and Midlands. The backdrop to his comment also happened to be the opening in London of the new Vapiano pizza, pasta and bar concept, which is being headed by SSP’s former global marketing boss Ian Daly and Barnes’s ex-La Tasca colleague Mary McLaughlin. Thank heavens for the optimists wanting to give consumers a reason to spend their money. Marketing your way out of the slow-down not only makes sense, it is much more fun too.