Seven paths to growth in 2018

Engaging staff, adopting technology and getting more women into senior positions should be among the big targets for operators in 2018, CGA vice president Peter Martin told the Casual Dining show.

Engaging staff, adopting technology and getting more women into senior positions should be among the big targets for operators in 2018, CGA vice president Peter Martin told the Casual Dining show. He was drawing on findings from CGA’s exclusive 2018 Business Leaders’ Survey—a poll of nearly 200 senior-level people in eating and drinking out, produced in partnership with Barclaycard.

The Survey reveals a tough trading environment, with like for like sales rising only 1.1% in 2017, according to the Coffer Peach Business Tracker. Rising people, property and food costs, the risk of market saturation and uncertainty over Brexit are creating something of a perfect storm for operators—but business leaders remain optimistic about their prospects. Here are seven messages from the Business Leaders’ Survey to focus minds in 2018.

1. Expand carefully

With a net increase of nearly 4,000 restaurants over the last four years, the risk of over-supply is becoming acute. The Business Leaders’ Survey indicates there will be fewer new entrants to the market in 2018, and suggests many existing brands will rein in their expansions.

There are still plenty of good opportunities out there, but operators need to pick their sites carefully, Martin said. “[Opening] plans are being pulled back. It’s not to say you can’t make your mark, but you can’t just build it and hope they will come—that doesn’t work any more.”

2. Engage staff

“One of the great battles this year is around people and talent,” Martin said at Casual Dining. The Business Leaders’ Survey reinforces the correlation between good service and customer satisfaction—but finding the best team members is easier said that done. Three in five operators are concerned about staff availability in 2018, with Brexit putting pressure on immigrant labour in particular.

Business leaders realise the importance of finding and keeping good staff, and two thirds plan to increase their investment in training in 2018, the Survey shows. But more needs to be done, Martin said. “We haven’t quite got it right on staff engagement in this industry yet—there are a lot of opportunities there.”

3. Embrace the right technology

The Business Leaders’ Survey shows operators are starting to adopt some forms of technology, with 90% now offering contactless payment and more than a third letting customers order online and split bills. But Martin said the shift to digital could be faster—though not at the expense of human interaction. “How do you balance the efficiencies [of technology] with the risk of messing up that fundamental customer experience? It’s a big question for the market.”

Challenges like POS integration and data overload are holding some leaders back, he added—and only two in five leaders plan to increase their spend on technology in 2018. “Technology can be a differentiator, but my concern is that people can too easily move away from it… I would have hoped that the level of investment would be a bit higher.”

4. Spot the trends

In an ultra-competitive market, it’s more important than ever to stay on top of food and drink trends. Business leaders tip vegan and free-from as the top two food trends in 2018, with healthy eating rising up the agenda fast. “That indulgence versus health balance in eating out has really tilted to health,” Martin said.

In drinks, leaders expect craft beer to continue its rise in popularity, and there are opportunities to increase sales in soft drinks too—especially low-sugar options following the introduction of the government’s sugar tax. “There’s going to be a lot of churn in the soft drinks market this year,” Martin said.

5. Get more female leaders

Four in five leaders responding to CGA’s Survey think there aren’t enough women in senior positions in the sector, and fewer than two in five have a plan in place to do something about it. Martin said the figures showed how much work remains to be done to encourage female leaders. “It’s an issue we can’t avoid. If we want to be seen as a modern industry and a great place for careers, we’ve got to do something about this.”

6. Focus on experience

Four in five business leaders consider the quality of customer experience as the most important driver of visits, the Survey shows—and now more than ever, it holds the key to loyalty, Martin said. “It’s all about the experience… it’s no longer about being cheap and cheerful—it’s about providing something more than that.”

7. Stay positive

Download Business Leaders’ Survey Report 2018

Despite doom and gloom around some high-profile restaurant closures recently, there are still plenty of opportunities for growth, the Business Leaders’ Survey shows—and only 9% of respondents are downright pessimistic about their business’ prospects this year. “This is a resilient sector… it has an awful lot of pressures, but people are still going out to eat and drink,” Martin said. “There’s a lot of energy and innovation around, and this is still an industry on the front foot.”

The full report on the CGA Business Leaders’ Survey, produced in partnership with Barclaycard, is available now. Contact the CGA team for more information and details of bespoke analysis and presentations.

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