In the face of spiralling costs, operators are looking for a way to view all their expenses in one place, to compare figures and find out where their profit really lies, according to research by The Caterer in partnership with Access Hospitality. Elly Earls reports
After Brexit, hospitality operators’ biggest concern is rising food costs, followed by rising rent and rates, according to new research carried out by Access Hospitality and The Caterer.
It stands to reason. Hospitality costs hit a 12-year high last year, according to data published by UKHospitality and Christie & Co in November, with controllable costs rising to an average 52.5% of turnover.
The research by Access and The Caterer, which surveyed more than 200 hospitality operators, clearly showed that raising prices is not the way to go – only 4% listed the tactic as a top priority for the next 12 months. Rather, it’s all about controlling costs, with nearly half of respondents saying this was where they saw their best return on investment in 2018.
According to Access Hospitality’s managing director Henry Seddon, one of the most effective ways operators can control costs is to switch from manual systems like Excel spreadsheets to digital stock management, procurement and HR solutions.
“Costs are going to rise; we can’t stop that, but operators need to be tighter around the control of their margins,” he says. “For example, if you move away from Excel-based systems for stock to a dedicated stock management solution, you get complete visibility over the margins across everything you’re selling. Many operators now will look at their revenue and say, ‘We’ve made this much,’ but they don’t have a solution that tells them what they should have made.”
If every digital solution is provided by the same company, operators can also cross-pollinate data from different aspects of their business – from people to stock to procurement to property maintenance – into one business intelligence solution.
“You can then get a holistic view of what your overall expenditure is versus your overall revenue and how many pennies within the pound you’re left with when all is said and done,” Seddon explains. “For many operators, that’s probably being calculated manually at the moment and a bit too late. They might find out four weeks later that due to costs across all the different areas of the business they’ve not made any money.”
The research found that 27% of operators know what they’re missing out on and plan to invest in business intelligence technology over the next 12 months.
Reducing admin time
Another benefit of having everything in one place is the saving in admin time. At present, 30% of operators spend three to four hours a week on back-office tasks and 20% spend five or six hours, which is not far off a day a week.
Seddon says much of this time is likely to be spent moving data from one system to another. “If you have an integrated solution, all of that will be done automatically, in real time,” he explains. “You’re not waiting for people to fill in the data, send it to head office and then for head office to put it together and report back to site. You know down to the second how you’re performing.”
The survey found that if operators were able to reduce their back-office admin time by just two hours a week, half would spend it focusing on the guest experience and 44% on training staff.
At Pizza Pilgrims, which started off as a pizza oven in the back of a three-wheel tuk-tuk and has since grown to eight restaurants with 250 staff, investing in Access’s hospitality software has allowed the team to do exactly that.
“Having everything in an electronic format allowed me to have more free time to spend with the customers and my team, so I’m able to provide training and offer a good service,” says general manager Marco Orani.
Enhancing employee engagement
Training and employee engagement came through as important areas of focus for operators too, which is to be expected, given that the hospitality sector is set to face an estimated recruitment shortfall of 60,000 workers per year from 2019 if EU immigration is squeezed. The research found that almost half of operators (48%) see training as an important strategy to minimise staff turnover. The only tactic deemed more effective was paying above a minimum wage salary.
More engaged employees also lead to more satisfied customers. As John Grant, solutions consultant at Access Hospitality, stresses: “Staff engagement is key within any business these days, but even more in a service-led sector like hospitality.”
It therefore came as little surprise that 36% of respondents said improved training was where they saw the best ROI in 2018 and that operators’ top choice of how to address one of their biggest concerns – finding and keeping valued customers – was to enhance employee engagement to improve service.
There are a number of ways HR software can assist. “Shift-swapping functionality allows staff to swap, give away or opt in to extra shifts with full manager authorisation, allowing for a clean, centralised and audited process for any change,” Grant explains.
With more and more potential employees seeking flexible working hours – more than 92% of working 18- to 34-year-olds, according to Timewise – the ability to swap shifts easily could mean the difference between them choosing one job over another. Indeed, 40% of operators surveyed by Access said more shift flexibility helps with minimising staff churn.
Access People’s self-service capability also allows staff to view payslips, book holidays and training, update personal details and view or download company documentation. “In simple terms, staff feel engaged when they are empowered with the information to allow them to perform their daily tasks or interact with the business more easily,” Grant says.
Improving customer service through mobile loyalty programmes A 2018 YouGov survey revealed that 77% of the UK population are members of a loyalty programme, with 72% of Brits believing they are a good way to reward customers. Yet the space is dominated by a few sectors – supermarkets, pharmacies and physical and online retailers; only 25% of the population are subscribed to a restaurant loyalty scheme.
This could be about to change: 40% of respondents to Access’s research said they want to use mobile app loyalty programmes to strengthen customer loyalty and keep them coming back. It was also found to be the top technology to improve customer service.
For Access Hospitality solutions consultant Harry Fallows, it’s a no-brainer that operators should be switching from either paper stamp cards or no loyalty scheme at all to electronic solutions – largely because of the data that can be collected off the back of them. “If I’m someone that constantly buys coffee on a Monday or Tuesday morning or who always buys red wine in a bar, you’ve got the information about what I buy and when I buy, so your marketing and promotions can be tailored,” he explains.
With a third of Brits saying they would spend less money on eating out after Brexit, according to PwC’s Retail Outlook report, this ability to communicate with and personalise offers to individuals is only set to become more important.
“Operators will be able to identify customers who have stopped going out as frequently and direct their marketing efforts into getting them back in the front door, whether that’s through promotions at different times of the day or different menu options that make it a bit more affordable,” Fallows says. “Without loyalty and that wealth of customer data, there’s nothing they can do about it.”
In technology terms, the key to a successful loyalty programme is that it can integrate with the business’s electronic point of sale (EPoS) system so that basket data – what customers buy and when they buy it – can be easily fed through.
Everything in one place
Access is soon to launch a new software – Workspace – that connects all of its solutions, so managers can log on once to analyse data on sales, wage costs, stock levels, bookings, purchase orders and maintenance call-outs in one place.
Fast-growing casual dining chain Hubbox is excited to see what this will mean for its business. The company, which already uses Access’s EPoS system, saw its gross profit increase by almost 6% in the last 12 months and has significantly cut time spent on administrative tasks, giving managers more freedom to work at a more strategic level and focus on improving business performance.
“With Access People, we’re going to make significant savings on our labour, and with Access Procure Wizard, we’ll buy better,” predicts Hubbox’s commercial manager Jonny Findlay. “With the integration, to be able to do all these things and manage the business is going to be amazing. I’m genuinely really excited for it.”
Employee engagement: beyond technology
Half of operators surveyed said they want to enhance employee engagement to improve service and strengthen customer loyalty.
As Warren Elliott, head of marketing and communications at Elite Hotel Group, explains: “It’s vitally important for all members of the business to fully appreciate how they fit into the bigger picture and how important their role is in delivering a truly memorable visit.
“The desire to become an internal brand ambassador comes from the sense of wellbeing at work – being happy in your role, being passionate about your product and being comfortable in your surroundings.”
At Elite, the team runs an internal awards scheme called GEMs (Going the Extra Mile) to promote employee engagement.
“As well as recognising outstanding customer service, any member of staff can nominate a colleague for going the extra mile, and the recognition takes place in the form of a presentation over afternoon tea,” he explains. “Staff can collect ‘GEMs’ to use towards further benefits, such as hotel stays and high street vouchers.”
Georgian House hotel in London places a similar premium on the development and engagement of team members through initiatives such as Wellbeing Wednesdays –weekly training sessions that support mindfulness – as well as being part of the London Healthy Workplace Charter accreditation system.
“By taking care of our team personally and showing genuine interest and support for their health and wellbeing, we can create an enjoyable working environment that has great effects on our customer service as a result,” says general manager Adam Rowledge, adding that flexible hours, working patterns and personal assistance during challenging periods for employees all contribute too.
At Edwardian Hotels London, looking after employees is also a business priority. “Our entire culture is centred around our people and we have been committed to ensuring that everyone feels they have a role to play in the organisation’s success for the past 40 years,” says Caroline Marais, general manager for human resources.
“We work closely with our people to provide chances for them to feedback on how the business behaves – monthly team forums, online staff surveys, one-to-one engagement between heads of departments and line managers and comment boxes make sure that our people are brought on the journey with us.”
About Access Hospitality
Access Hospitality is a division within the Access Group, specifically created to cater for the needs of the UK’s fast-expanding hospitality sector. More than 1,300 pubs, bars, nightclubs, restaurants, food-to-go and coffee shop operators across the UK use our modular, scalable solutions and services to reduce administration, streamline processes and ultimately increase GP.
Our hospitality suite provides a single touch point to control business costs and drive efficiencies for everything from reservations, ticketing, EPoS, finance, business intelligence, property maintenance to purchase to pay and HR/scheduling. Our technology enables multi-site operators to get back to focusing on what is really important – guest experience.