Insights
The year is (really rather quickly!) drawing to a close. So what better time to reflect on what’s happened in 2018 and, perhaps more importantly, anticipate what lies ahead for the industry and how restaurants can prepare?
2018 has been a challenging year which has seen many restaurant operators have to cope with escalating property costs combined with food inflation which has seen some well-established brands such as CAU, Jamie’s Italian, Prezzo, and Carluccios run into difficulties. In fact, the number of restaurants fell for the first time in eight years this year*.
Meanwhile, the level of competition is unprecedented, with new concepts, business models and pop-ups appearing all the time all looking to meet the aspirations of a large and growing group of consumers – those who want to experiment, try something new and spend their money with brands that care about core issues such as sustainability and promoting local produce.
So, what can we expect in 2019?
Most recently we have all seen the news about allergies and the dreadful impact that incorrect or incomplete labelling of ingredients can have. I think that 2019 will see dramatic changes to the way quick service restaurants label their food, with a real focus on team members who are at the front line when it comes to dealing with allergy related questions. The sector will have to take responsibility for ensuring their teams are trained, supported and confident in this area.
The level of uncertainty surrounding Brexit will also continue to impact on operators who are already under pressure to find resources, partly due to the poor image the industry has historically projected about long unsociable hours for low pay. Leaving the EU next year could see many existing European workers being driven out of the UK, this combined with new workers facing difficulty entering the UK to work, operators could find themselves under staffed.
It’s fair to say that many dining trends witnessed in 2018 will continue to gain momentum next year – including plant-based diets and healthy eating. According to a report from Mintel, 35% of the UK are now flexitarians. Flexitarians are people living healthy flexible lifestyles who while predominantly vegetarian don’t deprive themselves of meat when they fancy it. Restaurants, therefore must appeal to this growing market of guests who want to minimise their effect on the environment and keep healthy to stay ahead of the competition.
Similarly, the combination of social influencers and documentaries talking about environmental and sustainability issues (the BBC’s Drowning in Plastic and David Attenborough’s Blue Planet II, to name a couple) will continue to encourage restaurants to shift and adapt their offering to become more sustainable eco-friendly.
I recently read in BBC Good Food, in which Jonathan Moore, Waitrose's Executive Chef discussed the fact that diners will soon be looking for four meals a day instead of three. Lifestyle changes now mean that we are eating breakfast for dinner and dinner for lunch. Restaurants need to embrace this flexiblity and maximise the opportunities that a fourth meal could present. Although what this extra meal will be called, I don’t know!
From Deliveroo to Uber Eats, if you live in a big city you can’t fail to notice the a brightly coloured swarm of food delivery riders on the streets. Research that we carried out this year highlighted that 48% of our Mystery Guests who currently use delivery apps would prefer to order online, directly from the restaurant itself. So, could 2019 be the year for restaurants to invest in their own delivery infrastructure and take control back from the delivery giants?
What can restaurants do to survive… and thrive?
Operators need to find that balance between the memorability of an experience and the efficiency of its delivery. So, understanding what guests are saying about you is absolutely critical if you want to make sure you’re at the top of your game and providing the experience they expect.
I think we’ll see a lot more development with next generation CRM systems allowing restaurateurs to ensure they are proactively engaging with their guests and listening to their feedback. There’s a huge amount of data out there being collected – from guest feedback, mystery visits and guest reviews – and this really enables operators to track the guest journey and understand both the experience and levels of engagement at every stage. But it’s what they do with this information that determines whether they’re successful or not.
If data is collected and used effectively, it will inevitably lead to an enhanced guest experience and ultimately increased revenue and guest loyalty.
This year, at HGEM, we’ve seen an increase in operators using employee surveys to keep track of Employee Net Promotor Scores (ENPS). Understanding how teams are feeling at different stages of their employment has helped our clients engage and motivate their teams, putting them at the heart of a positive guest experience.
Final thoughts…
Christmas as always is a critical trading period for restaurants and this year even more so, but before the over-indulgence of Christmas is over, operators need to start thinking ahead to January and how they will cater for 2019 guests to get ahead of the competition. Those embarking on Dry January and Veganuary for example, could be key to starting as they mean to go on as the new year starts. Give guests what they want, when they want it, you can almost guarantee return business.
If you would like any advice on how prepare for 2019 and how our services could help your business to stay ahead of the trends please contact us today on 01225 470 999 or email enquiries@hgem.com
*Data from analysts CGA
