At the recent ceda Digital Event, CGA vice president and Atlantic Club founder Peter Martin laid out some of the most important dynamics facing operators and suppliers in the new frontier of trading. Here are his top five.
1 Delivery uptake
Deliveries and takeaways have satisfied consumers’ demand for restaurant experiences during lockdown, providing a crucial source of sales for operators. CGA’s BrandTrack research has shown a massive increase in sales, with half (53%) of Britain’s population getting a delivery or takeaway from a mainstream branded operator in the last six months. “Just about the only traffic on the roads at the moment are delivery vans… we can’t go out so we get it delivered,” said Peter Martin. What’s more, most consumers plan to continue their delivery habits to some extent, even when eating-out resumes. “It’s become what we do.”
Lockdown has sparked other extensions of brands into people’s homes, like meal kits from the likes of Pizza Pilgrims, Hawksmoor and Dishoom. Drive-through has been another thriving channel for the QSR sector, with stores being reconfigured for more click’n’collect too. And delivery isn’t just about food: a third (35%) of 18 to 34 year-olds in city centres have had alcohol delivered. “It reflects the creativity that has come out—people have adapted their businesses very well,” Martin said.
2 Digital adoption
The pandemic has dramatically accelerated the adoption of technology by consumers and businesses alike. From searching for venues to booking tables to ordering and paying to sharing feedback, tech has made consumers’ interaction safer and more convenient.
“The whole journey of going out is punctuated by digital now, and people are really getting used to it,” Martin said.
Operators have embraced it too—not just for engaging with consumers, but to improve labour and stock planning and other back-of-house tasks. CGA’s Business Leaders’ Survey found that more than nine in ten (96%) leaders think tech will be fundamental, important or fairly important to their operations after lockdown, and they have grown much more comfortable handling it. “The industry gets it, there are fewer tech sceptics. Technology is going to be a major driver of how the sector develops.”
3 Shift to quality and provenance
The pandemic has prompted many consumers to become more conscious of their health, and operators and suppliers are responding by sharpening their focus on high quality items, healthy options and local produce.
People are conscious about their financial positions, but what trumps that is health and wellness,” said Peter Martin. “It’s not just about value—it’s about quality of experience. People want a big bang for their buck.”
The success of Sweetgreen in the US, which bundles smart use of technology with an emphasis on freshness and provenance, could be a sign of things to come in the UK. As with delivery, the trend applies to drinks too, with a growing demand for local suppliers and British brands.
4 Staying local
Lockdowns and the wholesale switch to working from home have given people a fresh appreciation of the businesses on their doorsteps, and that is set to continue. It has worked in favour of chains with sites in residential and rural locations, and three quarters (73%) of leaders think the desire to stay local will be a net gain for their business. “It’s not something they’re worried about—it’s something they want to embrace,” Martin said. But it could be less welcome for businesses in town centres if workers continue to stay away from offices. “We’ll be seeing a new trading landscape.”
5 Political creep
The government has been a source of both help and frustration since the start of the pandemic, supporting business through furloughing and tax relief, but also imposing heavy restrictions on trading. The big question now is whether policy-makers will want to continue along the path of regulation. As Peter Martin put it: “We’ve invited them in—will they stay?”
Businesses have worked very hard to comply with safety requirements, leaving the large majority of consumers feeling safe, and CGA’s research shows there is now major pent-up demand to get back to hospitality.
“We know consumers want to come out again… though we’ve still got to convince a chunk of the market that it’s safe.” Local government could help by allowing business to use street space for outdoor eating and drinking, as in parts of central London. “Getting those positive collaborations is going to be important.”
Five factors will shape the recovery in the sector in the coming months: government support; the financial strength of individual businesses; the creativity and resolve and management and teams; the willingness of customers to return to the market; and the wider economic and business climate. With signs that long-term market confidence is increasing and new openings are being lined up, there are grounds for optimism among operators and suppliers, Peter Martin concluded. “The people who will make the most of these next few months are the ones with creativity and resolve.”
For more about the ceda Digital Event, click here.