EP Magazine

Are we a fickle lot?

Business Tales - The Chief Executive

EP has asked a senior figure to write on their experience. We have kept their identity anonymous for two simple reasons; firstly, to allow open, honest dialogue of thoughts and events without any comeback and secondly, to ensure that the focus is upon issues rather than sidetracked by gossip or personality factors

IN HOSPITALITY WE ALL HAVE OUR OPINIONS, VIEWS, themes and most importantly cultural bias. We have believed for many, many years that this gives us a  point of difference – a position of strength – a differential in leadership and an employment advantage over our competitors.

But then we have the reality check of a downturn in the economy and where do all these values go? Now I’m not saying that we throw them all out and abandon them totally, but I do think it changes our focus back to our core business of simply ‘making a profit’.

Customers think that we are all making a fortune from selling food and drink across the sector at  flated prices. Nobody realises the costs that are genuinely associated with operating. Costs that the Government keep increasing in order to justify their ever increasing incompetence. Who in their right mind would have put  the VAT back to 17.5% when you want to stop a ‘double dip’ recession. (I could talk about traffic jams, but that can wait for another article..!)

So, when air miles was challenged with food miles and the impact we were supposed to be having on the survival of the world through CO2 emissions, we all got on the band wagon and started going crazy about selling local produce and sell it we did. And lots of it. Then the consumer started to realise that the price of a piece of meat that had been bred locally was actually more expensive than meat sourced from further afield – and lo and behold – sales started to reduce as they became more bothered about price than the origination of sourcing. And so did we.

Focus on margin management took over as costs of operating continued to increase and for many companies the role of chief executive started to become a role of debt management. A lot of hospitality companies carry a lot of debt. A lot of this debt is going to be renegotiated at an increased margin in the forthcoming months and this realism has made everyone focus on one thing – how to protect any sort of equity value.

It’s not just the supply chain that has come under ‘modern pressure’ – remember when we had a significant skills shortage, particularly in London, and particularly in our kitchens. The UK shortage of chefs was a real concern at that time and we had working parties set up by lots of different hospitality bodies to discuss how we were going to grow the market with such a shortage of labour – and then Eastern Europe opened up and all of a sudden the problems had gone away. But did we stop our focus on training and developing the skills base and, indeed, veer from the most important key performance indicator of retention?

So, what’s next for all of us in hospitality? More of the same? Or a different position? I think it is about fame! Modern fame and nostalgic fame. The association with modern famous people allows us to score over our competitors – they could be the likes of Jamie Oliver with his Jamie’s Italian brand or the continuing depth of relationship with the customer at Carluccio’s. Or it could be a regional famous association like Michael Caines down in the South West or Paul Heathcote in the North West? Or a famous person who is not from the industry. Why not have a Tiger Woods Sports Bar – that would attract lovely looking people! And then there is our liking at the moment for nostalgic brands, brands that have reminded us how old they are – like Pizza Express and Hard Rock Cafe. Maybe Harry Ramsden’s will come back...?

But beware, because if history is anything to go by, our fickle side will come out again and we’ll be off down another road!