Rigorous safety measures and the Eat Out to Help Out scheme have helped Oakman Inns to bounce back from lockdown with “spectacular” trading, its Founder and Executive Chairman Peter Borg-Neal said this week.
Talking to CGA Vice President Peter Martin at the latest #AskArena webinar on Tuesday (25 August), he said Oakman had found the right balance between safety and experience since reopening its 28 pubs in early July, rigorously enforcing precautions without compromising atmosphere. Some safety measures, like reduced capacity and glass screens separating tables, may well stay beyond the pandemic. “We’ve made sure the pub still feels like a pub,” Borg-Neal said. “People like the screens and feel safer… but they can still see what’s going on and feel the vibe.”
He said the Eat Out to Help Out scheme had doubled sales on Mondays, Tuesdays and Wednesdays, without compromising the rest of the week’s trade. Oakman’s positioning in the London commuter belt has helped it capitalise on the shift to working from home, and widespread hesitation about using public transport should play into its hands for some time to come—at the expense of major cities like London. “We think the conditions will remain in our favour until at least Christmas… people feel an affinity with local at times like this,” he said. “There will be a rebuild in London because it always comes back, but it’s going to be slow and quite painful.”
Oakman jumped the gun on Eat Out to Help Out by funding half-price meals itself before the government’s subsidies started—and has just announced it will continue the deal throughout September. Borg-Neal said it had drawn in people who were previously hesitant about visiting pubs, as well as consumers who might otherwise have used value-led brands. It has added around £10,000 a week to pubs’ sales, and along with the VAT cut and help on business rates has significantly improved profitability.
It has also changed his attitude to deals, he admitted. “I always said we wouldn’t discount—I thought it was a fool’s game… But the ability to run this [discount scheme] without undermining your margins was too good to miss, and it’s been spectacular.” The scheme might now prompt changes in attitudes to dynamic pricing, he suggested. “I’d be happy if we could get to a place where you pay less in the week than at the weekend—a supply and demand model. That’s something we have to take seriously now.”
He also paid tribute to Oakman’s staff, who have coped well with the twin challenges of stringent safety precautions and hectic early-week trading. All employees will soon get a bonus, and there will be an extra week’s wages for those who are still with the business in March when the government’s Job Retention Bonus is paid. “We want to share the upside with them… they’ve worked extremely hard, and saying thank you to them is incredibly important.”
He added that Oakman’s partners throughout the supply chain had sustained the business over the crisis too. “Suppliers have been fantastic… when we had to ring round to say we needed some help, they were incredibly supportive… I’m sure we’ll all remember that.”
In line with Oakman’s upbeat mood, CGA’s Client Director Food and Retail Fiona Speakman gave the webinar more reasons for cautious optimism about the future. They include data from CGA’s June Business Confidence Survey with Fourth that shows 16% of leaders are optimistic about the market’s prospects over the next 12 months—a fraction of the level of February (60%) but three times the figure from April (5%), when the lockdown was in full effect.
She also pointed to evidence of increasing footfall, drinks sales and reopenings, improved consumer confidence and a steady average spend. But with a sizeable proportion of the population still to return to the on-trade, and BrandTrack data showing that 37% of consumers have less disposable income as a result of the pandemic, there is still a lot of work to be done. Fragile confidence and the risk of local lockdowns are likely to keep sales well below usual levels for some time, but reinforcing safety measures and a hyper-local understanding of what people want will help speed up the pace of recovery—and suppliers have a big role to play in those efforts.
The sector has been really successful in creating positive experiences… it’s doing a sterling job of reengaging consumers,” Speakman said. “But outlets can’t get complacent… consumers are going to be holding them to very high standards, and helping operators deliver them is going to be very important.”
You can watch Arena’s webinar in full here. To learn more about how CGA’s research sources can support both operators and suppliers as the sector recovers, contact Fiona Speakman at firstname.lastname@example.org.