The MCA Restaurant Conference is always a great event, and despite the current times, this year was no exception. Indeed, more than ever there feels a real need for the industry to come together to share learnings and insights in order to help navigate the choppy seas ahead. As most are currently closed or operating only take-away or delivery boxes, I suspect the virtual conference attracted even more attendees than in normal times. The line-up featured a who’s who of the restaurant world and tackled head-on the current issues and concerns about the future. As a leading foodservice agency, we were there to hear the latest, from the horse’s mouth, so to speak.
With a packed schedule there was far too much to cover in its entirety, but here are some of my key take-outs from the day.
2020 was a huge year for them which saw both financial restructuring and a strengthening of their leadership team. The key learnings Zoe Bowley MD took from the recent crisis were: one, you’re stronger than you think and if you work together to innovate and support each other you can get there. Two, change is fundamental and last year may have accelerated it hugely, but despite the challenges it has made them stronger. Three, simplicity and honesty are key and social interaction is at the heart of all we do.
She is positive about Q2 with the vaccine roll-out and hoping for a Spring re-opening as hospitality is the social heartbeat of the UK.
This presentation drew from a previous one we have blogged here, with an additional focus on possible scenarios moving forward. The sad fact is that the total eating out market declined by over half in 2020 due to Covid restrictions, with Covid costing the sector over £200m a day according to UK Hospitality. The scenarios moving forward that Lumina looked at were (A) an optimistic -35% down in 2021 vs. 2019 based on the Government’s most ambitious roadmap with a re-opening 5th April. A second (B) where we see a -43% change vs. 2019 with the vaccine roll-out going to plan with restrictions relaxed a little in the summer and re-introduced in the Autumn. And finally, (C) a worst-case scenario which mirrors (worryingly) 2020 at -48%. Correspondingly scenario A sees market growth at £56.7bn, B at £51.9bn and C at £47.3bn. The key trends highlighted for 2021 were convenience, indulgence, customisation, quality-led, experiential, sustainability, healthier eating, technology and value scrutiny. In summary there will be a tough year ahead, with menus streamlined and additional revenue streams sought via delivery, meal kits and pivoting to retail.
Loungers & Cozy Club
It is fair to say that Loungers’ decision to focus on regional and suburban sites has left them in a better position than those city centre operators. But that’s not to say it hasn’t been hard. Nick Collins, Chief Exec of Loungers, is incredibly proud of his team and the resilience they have shown. Indeed, the adversity has brought out the best in so many and by communicating regularly and honestly with them they have kept going through lockdowns, opening, closings and re-openings. He hopes for an April opening and a summer with far fewer restrictions to make the most of pent-up demand. Here’s hoping!
Dishoom, Tomahawk & MEATliquor
Despite being famed for their amazing restaurants, Dishoom has embraced delivery and home meal kits to survive in the current times and although it is fair to say London has been hard hit by Covid restrictions, they see a place for city centre restaurants in the future. A future which might well see more people living in city centres as workspaces are repurposed in the wake of the pandemic bringing more home working.
Howard Eggleston of Tomahawk has bucked the trend to expand during the pandemic and with more sites becoming available they are set to continue this growth with a view that 2022 will see happier times for hospitality.
MEATLiquor has also moved to delivery and during 2020 closed and then reopened one of its restaurants. Scot Collins believes their business is more streamlined and efficient than ever before and despite being impacted by the pandemic he is positive about the future and the location of the new site as an upgrade on the old. Despite his initial denial, disbelief, and desperation when the pandemic struck, which was swiftly followed by confusion when the Government stepped in, he has rolled with the punches and despite no major plan is positive about the chance it has given him and the business to review and take stock. His one saving grace…being bald meant he didn’t suffer lockdown har issues. Every cloud, eh.
AlixPartners Financial Advisory Services
Graeme Smith looked at the financial landscape from fixing the balance sheet to options for investment and debt refinancing, a topic close to pretty much every restaurateur’s heart at the current time. Despite the Government’s support to date, there is an impending financial crisis within hospitality with no clear plan for what will happen long term on VAT and rent and more pressingly what will happen when the lease forfeiture moratorium expires at the end of March. With turbulent times ahead there will always be winners and losers but one thing is sure, without the right Government support there are sure to be more more of the latter.
Chris from CACI turned his attentions to consumer behaviour and how it has changed over the past year and how it may be affected longer term. With new habits like delivery and technology looking set to continue, will there be pent up demand, or will we still be cautious once restrictions are lifted? One observation on consumer behaviour that was particularly poignant, is that before Covid money used to give people freedom of movement, to travel and experience the world. Whereas now, money gives people the freedom to stay at home, as lower socio-demographic individuals tend to have jobs that have required them to leave their homes, whilst more affluent individuals in more white-collar roles have been able to work from home.
The Evolution of Delivery with Deliveroo, Franco Manca & AlixPartners
The next session took three different perspectives on the delivery phenomenon, which has been accelerated by the pandemic. We heard from Deliveroo how consumers are seeking new dishes and cuisines. Also, on how they are reaching a far wider audience than ever before and one which is ordering more often rather than just around the treat occasion. The inability to go out to eat has led consumers to sate their desire for food they haven’t cooked themselves via delivery channels. With the pandemic, delivery came into its own and was agile enough to work with operators to get them up and running in record time.
The growth is incredible and in fact, it’s not just individuals, corporate orders are up 150% whilst e-gift vouchers are also selling well. But we often hear the issue of the cut a third party delivery partner takes, making this essential revenue stream far less profitable than selling direct. However, having tried running delivery as part of Bombay Bicycle Club prior to Franco Manca and The Real Greek, David Page was clear that it didn’t work, and operators in general are better off working with a trusted partner like Deliveroo and sticking to their knitting. It is a fact however that as far as brand experience goes, delivery can be a weak link and removes full control from the brand, but it seems the advantages outweigh the disadvantages.
Will Beckett of Hawksmoor was in NYC when the pandemic hit. Since then, he has worked hard to keep up morale with furloughed staff and has pivoted to at home meal kits which have been a sell-out success. His worry is for the future when Government support ends, and we find ourselves with a depleted workforce with EU nationals having gone back to their countries of origin, as well as British staff having left the sector. The up-side, hospitality will bounce back and will be able to offer jobs as a crucial part of the economic recovery, we just need to ensure that long-term hospitality is seen as a first-choice career by making it attractive enough – which is still a work in progress.
Once again, we looked to the data and key insights with CGA, who highlighted the importance of technology and the changing consumer journey following the impact of Covid. With all age groups adopting tech we have seen the market move forward five years in the space of one and with this accelerated change has come a new landscape for the hospitality sector. Simply put, it is one which those who are agile and flexible will be able to leverage, but equally one that will see many operators fail.
Peter Martin, Oakman Inns & Azzurri
The day ended on a panel discussion on what the future holds. A tough one for anybody at the moment. Suffice to say operators are eager to get back to business as soon as possible, which hopefully looks more likely as the vaccine roll-out continues although when exactly is still up in the air. What we can be sure of is that this industry is determined to bounce back and after months of staring at four walls hopefully the British will help support their local operators with all that pent up demand we hear so much about. If the Government can offer clear support and a road map for hospitality we will certainly have a far better chance of a scenario A rather than C, as outlined by Lumina.
Well done to MCA and Big Hospitality on another great event. Hopefully, the next Restaurant Conference will be in real life but whilst safety is paramount, they did a great job on the virtual platform.