Here are some predictions from Paul Newman, RSM’s head of leisure and hospitality, on what 2018 has in store for the sector.
We will see the full impact of GDPR (General Data Protection Regulation) in 2018. Significantly smaller mailing lists will make it more difficult to target customers through traditional means, leaving operators to undertake smaller, more frequent, marketing initiatives and make more effective use of social media and influencers. For those unprepared operators, the required operating system and procedural updates, together with staff training and the associated management time are likely to significantly impact bottom lines.
The tequila takeover
2018 will see a surge of Tequila based cocktails and sippers appearing on menus. We expect the Tequila renaissance which has slowly gathered pace over the past decade in the US to be adopted at a faster rate by UK operators. The trend has seen a move away from cheap mass-market products towards higher quality products, combination cocktails and sipping tequilas.
The Blue Plant II effect
David Attenborough’s hit show has passionately highlighted the eight million tonnes of plastic waste that leaks into our oceans each year, killing more than one million seabirds and 100,000 mammals. Restaurant and pub operators use thousands of straws and plastic stirrers each year, often without customers asking for them. We expect the trickle of operators who have so far announced their removal of plastics to gather pace as consumers young and old become more vocal in their demands for action to be taken to protect our coastlines, marine life and oceans.
More site closures, restructurings and consolidation
We anticipate seeing a larger number of site closures, restructurings and consolidation amongst brands play out in 2018. The combination of dampening consumer confidence and continued cost headwinds will make some sites no longer viable, particularly those where leases were signed up some years earlier. The extent of site closures will depend on the flexibility of landlords and the long-term view of the banks and Private Equity funders. Those operators with deep pockets will look to capitalise.
A focus on staff retention
We see a focus on staff retention being a key theme amongst operators in 2018, particularly through creating career ladders, training programs and education opportunities. Staff play a vital role in enhancing the customer experience. A notable encounter can lead to loyalty, recommendations and ultimately profit. In an ultra-competitive market and in a time where recruitment is challenging due to uncertainty surrounding EU nationals working in the UK, a valuable part of the sector’s workforce, operators must retain the best people to stand out.