Archive for the ‘Pubs’ Category

People 1st believe that older workers should be considered to fill the skills gap

As business minister Pat McFadden urges employers to recognise the skills and experience of older workers, and the Equalities and Human Rights Commission (EHRC) discusses proposals to scrap the compulsory retirement age of 65, People 1st chief executive Brian Wisdom asks why the hospitality industry isn’t looking to this sector to fill the skill’s gap.

Older workers are a constantly growing demographic. By 2033, 23 percent of the UK’s population will be aged 65 and over, up from 16 percent in 2008. The EHRC’s recent survey into older workers’ aspirations found that a quarter of men and two-thirds of women over 50 want to carry on working past the state pension age – yet hospitality continues its over-reliance on a shrinking young workforce.

Staff retention is already a major issue in the hospitality industry, and the failure to attract and utilise older workers is a key contributor. By positioning our industry as one for the young, we are missing out on a wealth of experience from later life workers who, despite having valuable skills to offer, may take a look and think ‘that’s not for me.’

One company that is bucking the trend, and reaping the benefits of employing older workers, is McDonald’s. In August 2009, Lancaster University carried out a survey of over 400 McDonald’s restaurants and found that customer satisfaction rose by 20 percent in those employing staff over the age of 60. Around two-fifths of their restaurants currently employ staff in that age bracket.

Some of the strengths highlighted by the research included older workers’ empathy, ability to connect with customers, and willingness to ‘go the extra mile’ to deliver the best possible service. 44 percent of respondents also valued the mentoring skills that later life workers offered to their younger counterparts, helping them to mature and grow within their roles.

It’s clear that older workers have a lot to offer, often with essential skills that can only be learnt through experience, but like all other employees, they will continue to learn and grow with the business. The EHRC found that twice as many over-65s want to be promoted than those who want to downshift.

This is supported by research from the University of Stirling, in partnership with People 1st, which looked at how to sustain employing older workers in the hospitality sector through learning and training.

The findings suggest that older workers value an approach to training and development which recognises their previous experience and, in turn, acknowledges their diverse and individual learning needs and ambitions.

The research also showed that the traditionally perceived disadvantages in hospitality and tourism, such as low wages, unsocial hours, repetitive work and seasonal employment were not entirely negative issues for older workers. Whereas younger workers may be put off by these factors and move on, older workers find compensation for them in being needed, valued, and maintaining a good work-life balance. Perhaps it is time for companies to target this group for some stability?

If more employers follow examples like McDonald’s and recognise the value of older workers, not only can we avoid the inevitable problems of over-reliance on a shrinking demographic, but we can also tap into a wealth of skills and experience that can broaden our industry’s appeal as a whole.

Christmas proved a wealthy trading period for a number of hospitality operators

The Christmas period resulted in some impressive sales figures for pub and restaurant groups, but it probably won’t last into the new year, says Mark Stretton, editor of M&C Report.

Thankfully it now looks like it was indeed a relatively happy Christmas. A good month after the incident and against predictions of a Scrooge-style affair, the figures indicate Britain’s pub and restaurant groups enjoyed a merry old time of what is a key trading period.

A clutch of groups have reported positive numbers, including two of its biggest players – Mitchells & Butlers (M&B) and the imaginatively-named Restaurant Group (it operates restaurants, it’s a group). M&B, the pub and casual-dining group behind All Bar One, Harvester and Toby, saw like-for-like sales climb 3.4% against the same key trading window the year before; The Restaurant Group, which runs Frankie & Benny’s, saw like-for-likes rise 5.5%.

The Coffer Peach Business Tracker, which collates sales data from some 14 of the sector’s biggest operators, including Gondola, M&B, Punch and Whitbread, said like-for-like sales rose 2.9% in December versus 2008. Some of the sector’s private groups – under no obligation to keep shareholders abreast of trading – also released figures (they were that pleased): like-for-like sales at Tragus, they of Café Rouge and Strada fame, came in 3.7% ahead; Geronimo Inns, the upmarket pub group, reported like-for-like sales growth of 6%; Novus Leisure, the London-centric bar group, went better posting a steamy 10.6%.

While it’s worth remembering that the world was mired in doom in the corresponding period in December 2008 – when banks were collapsing – Christmas 2009 was a bit of a result.

Festive cheer improved trading

One of the constants of this recession is that the eating-out market has performed much better than anyone thought. The habit, it seems, is deeply entrenched in the national psyche and the festive period showed that people were prepared to leave their bunkers.  In like-for-like terms, it would have been a vintage Christmas if it hadn’t been for the dampening effect of snow falls on some key days in the build-up. The snow also promises to make January trading figures pretty grim reading.

On that note, and perhaps not that surprisingly, in addition to reporting decent numbers, people are universally urging caution on trading prospects in the coming year: “We had a good time, but now it’s back to reality… We’ll be OK, but it’s going to be a pretty tough market,” seems to be the message. It’s a similar story in the retail sector, with bellwethers such as J Sainsbury, John Lewis, Marks & Spencer and Next all delivering good numbers – but all quick to reiterate their belief that 2010 will be no fairy tale.

In the face of some strong headwinds – tax rises, interest rate rises and so on – perhaps the sector will continue to surprise with its resilience.

Enlightened discounting?

PS. My wallet is bulging. Sadly not with money, but with various loyalty cards from the eating-out market. It seems everyone – from coffee shops to pubs – wants to reward my loyalty. Providing my card is stamped, I can get my 10th cup of coffee free almost anywhere. This sort of offer is also now running to pints of beer, buns, burgers, pizza, sushi and all sorts. It is the time of year for deep discounting, but perhaps the sector is eschewing the two-for-one deal in favour of something a little more enlightened.

As people spend more of their lives online, the industry can't afford to ignore the use of social media and online marketing to reach them

As more and more people live their lives online, companies can’t afford not to use digital marketing and social networking websites, says M&C Report editor Mark Stretton

In the old world Unilever spent 97 per cent of its marketing budget on TV advertising. Next year it will reportedly devote 50 per cent of its entire global spend to digital marketing.

When a consumer brands behemoth such as Unilever – owner of Flora, Marmite and PG Tips – makes such a fundamental change to the way it reaches consumers, it is clear the world has changed.

There has been much noise around digital marketing and social media, especially about social networking brands such as Facebook and Twitter, and it is tempting to think of these things as passing fads: the latest, latest thing that will grab popular culture’s increasingly fleeting attention span for the briefest of moments, before being dropped for whatever comes next. But the mist is clearing.

Given the brevity of television channels, and the plethora of alternative media platforms, big brands are starting to appreciate that buying TV ad spots is the equivalent of throwing jelly at a wall and seeing what sticks. On the other hand, using digital marketing in the right way – sending messages to those who have somehow sought out your business – is like firing an arrow at a target.

It also means that businesses of any size can build relationships with their customers. Increasingly, firms are starting to appreciate that being online is an increasingly important part of the way people live, and that Facebook and Twitter, having reached critical mass, are key components in a new age of communication.

As Dan Holm pointed out at the recent Digital Future conference, with more than 320 million users, if Facebook were a country it would be the fourth largest in the world, bigger than the US. There are
22.6 million people using Facebook in the UK. It is also not just the preserve of “yoof” – 33 per cent of Facebook users fall in the 35-54 age group. Plus, silver surfers (55+), which account for 34 per cent of internet use, are catching up fast. Toby Carvery knows this – it has a Facebook fan page with 40,000 members and gives discount vouchers via Facebook.

By the end of the year six million people in the UK will be on Twitter. It is something that Giraffe is alive to, and that YO! Sushi has just started encouraging (visit twitter.com to see who’s there, and who’s not). One of the key points, or “take-aways” to use the correct parlance, of the Digital Future day was that this stuff is happening. Companies do not have an option of whether to participate in online communities or not, but they can manage their presence and try to influence positively.

However, beneficial participation requires dedicated commitment. The point is, there is a point to all this; done well, online marketing and social media engagement creates footfall, drives sales and produces decent returns.

They say that word of mouth is the most powerful marketing tool, especially in the eating and drinkingout market. Social media is word of mouth, in the digital age.

As Holm put it: “According to Peter Drucker (the celebrated business author), the purpose of a business is to create and keep a customer. But now businesses can create a customer who creates a customer.”

And the next thing is mobile. Scott Seaborn, head of mobile marketing at Ogilvy, said that too many companies were just “ticking the innovation box” when it came to mobile, with social-media and marketing campaigns from other media channels crow-barred into a mobile format, rather than companies focusing on bespoke initiatives.

He said this was changing. “What we are seeing is the unique emergence of the channel. Mobile is a fantastic way to reach people – it is golden and 2010 will be the year of change in the mobile space. Lots of people have been saying [the time of] mobile is coming. It hasn’t happened yet, but it will happen soon, and it will happen fast.”

Mobile is not just about whizzy marketing campaigns, said Seaborn. It could be used for very simple messages, such as a text to a guest on their way home from an evening at a pub or restaurant, to check they enjoyed themselves and also perhaps including an incentive for them to return soon.

Mark Stretton is editor of M&C Report. Email mark.stretton@william-reed.co.uk

The experts can't agree what the future holds. Illustration: Paul Bommer

The experts can’t agree what the future holds — but at least restaurants are holding their own for now

Such is the din of confusion that surrounds the economy, I have been asked to mull the musings of those in the know — both positive and negative — considering the likely outlook for the business of restaurants.

Safe to say, there is something for everyone in the patchwork of differing predictions. Broadly, the world is split into two camps: those who think we are bumping along the bottom before we creep out of recession at the end of this year, and those who believe we are perched on a half-time ledge, part-way through another jump down — dubbed a double-dip recession. Those in the happy camp include Gordon Brown, Alistair Darling, and the Confederation of British Industry, which have all suggested the recession will be in the rear-view mirror by Christmas.

But not everyone is convinced. Many think we’re going to be paying for the excesses of the past few years for sometime yet. One analyst recently told me: “Every Labour government more or less bankrupts the economy, and this is what we are seeing now. The medicine is going to be quite horrible — higher taxes, higher unemployment, especially in the public sector, and a pensions time bomb.”

Unlike analysts, restaurant operators are generally a positive bunch, but even they seem very cautious.

Adam Fowle, the chief executive of Britain’s biggest pub and restaurant business, Mitchells & Butlers — which operates 2,000 venues — told me: “What we are seeing now — consumer confidence and expenditure levels flat or improving — is not what we are expecting to see next year, when we have the VAT increase in January, growing unemployment and a general election. At least two of those three things will impact consumer spending negatively.”

The general election is hugely significant because whoever emerges to run the country — presumably Dave & Co — will have to get serious about addressing the state of Britain’s finances. And that means higher taxes and less public spending.

The amount of money that needs to be saved from the public coffers annually was recently put at £100bn. It’s an almost incomprehensibly large number — the equivalent of four million salaries at
£25,000 a year. Putting the higher rate of income tax up from 40 per cent to 50 per cent would raise £2bn — one-fiftieth of the amount required.

So far, so depressing? It’s important to remember that what we’re experiencing is nowhere near as cataclysmic as everyone thought it would be. Lower mortgage costs mean that most consumers have been insulated — and higher taxes next year probably means that interest rates will have to stay low for a long time yet. So called “staycationers” — people holidaying in the UK — have helped leisure businesses such as restaurants, and Britain, particularly London, has reportedly been awash with tourists from overseas too, driven here by the weak pound. Cost pressures are also easing for operators.

A fundamental fillip is that eating out has proved resilient. While the sector is clearly under pressure — with volumes down — it is not a habit people have given up easily. Like the affordable treats of chocolate and lipstick (sales of both tend to rise in recession), it seems people need the comfort food of eating out. The key problem is nobody really knows what is going to happen. Confusion reigns. And if you’re not confused you really haven’t been paying attention.

Mark Stretton is editor of M&C Report

Only 6 per cent of women in hospitality make it to the top

Sharon Glancy, business solutions director at People 1st talks about why hospitality businesses can’t afford to ignore their female employees.

Women in leadership is back on the political agenda as equalities minister, Harriet Harman, calls for more women on the board. Although some may question whether this is political correctness gone a step too far, it raises some interesting issues for the hospitality industry.

Whilst I’m not in favour of positive discrimination and believe that women should be promoted on merit, it’s notable that hospitality has a lack of women leaders – an interesting paradox given that 59 per cent of the industry comprises women.

Yet, in an industry where labour turnover is exceptionally high – 31 per cent - and recruitment difficult, businesses can’t afford to ignore women. A recent survey by Leeds University Business School found a strong correlation between the proportion of women on the board and the survival rate of a business. They claim that one woman on the board can cut a company’s chance of going bust by 20 per cent whilst two or three female directors lowered the chances of bankruptcy even further.

Our own research found that only 6 per cent of women in hospitality made it to the top – half the UK average for all industries – and worryingly, the proportion of female managers had dropped from 49 per cent in 2005 to 46 per cent.

People 1st realised that it was only scratching the surface and wanted to have a better understanding of what was happening and to identify the drop-off points. Surely raising a family wasn’t the sole reason?

Anecdotal feedback indicated that confidence in a male environment was an issue. Women were generally reluctant to promote themselves and therefore didn’t have the same visibility as their male counterparts. Lack of career structure and female role models also seemed to pose barriers to the top.

To unpack this further, People 1st embarked on a major initiative called Women 1st to encourage more women to strive for the top and become ‘board ready’. We have set up a professional network which so far has 40 female members who are now starting to benefit from having their own personal mentor and sponsor, and the opportunity to take part in workshops and training. We’ve recruited dynamic and successful role models within the industry to mentor them and lend their voice to a campaign to highlight the benefits and output women bring to the business.

As the recession continues, hospitality businesses need the right combination of complimentary skills and talent on their board. By being more flexible and being aware of the barriers that women face, businesses can tap into a wealth of diversity of views and experience that can make all the difference between success and bankruptcy.