Member Article

The challenges and opportunities facing the leisure and hospitality industries

The leisure and hospitality sectors have been disrupted like never before in recent months, with operators needing to adapt their businesses in order to operate safely and give customers the confidence to return. One of the UK’s leading procurement businesses, Regency Purchasing Group, which services more than 3,000 businesses across the UK, has gained an unrivalled level of insight from its members on trends emerging in the market since reopening last month.

Alex Demetriou, Managing Director of Regency Purchasing Group, explains: “Leisure and hospitality businesses have and continue to face a great number of challenges, from introducing new safety measures to staffing, forecasting trade and managing stock levels.

“Arguably the biggest challenge and indeed change, hospitality businesses have had to face in recent months has been adapting to the new safety measures. Social distancing has resulted in the removal of tables, meaning less covers and subsequently less takings. Navigating the changing status of creating a Covid safe environment has also been difficult, with masks not initially required but then expected once the public were asked to wear them in public venues such as retail stores, changing the landscape of how customers view their business. Creating a safe environment for both staff and customers has also been a priority.

“Furloughed staff not being keen to return to work has been a notable challenge, whether the reason be staff getting used to being at home and getting paid, fear of working in a customer facing business, or issues with childcare. There has also been instances where staff had got second jobs, which they were legally allowed to do and were enjoying two salaries, but when it came to returning to their initial job that had been kept open via the furlough scheme, they decided to stay in the new role they had found. Businesses therefore thought they could rely on their furloughed staff, but in some instances, this was not the case. The good news for operators is that there people out there looking for work, so they can replace the staff, but they still need training.

“Finding the right staffing level in order to provide the right service has also been tough for operators, as forecasting customer habits has become increasingly difficult. We have also seen this vary across the country, with consumers rushing to the coast and open areas and the city centre suffering disproportionately.

“With levels of trade continuing to change, forecasting and managing stock levels has been ever more challenging. The success of the Eat Out to Help Out scheme has meant operators need to plan for the early part of the week being as busy as the weekend. This in turn has impacted staffing further, as after a busy weekend, chefs would usually take a few days off at the early part of the week. For many venues, Monday, Tuesday and Wednesday are now Saturdays, so there is little or no respite. A fantastic problem for business owners to have, but managing the staffing levels, energy levels and moral is always a challenge as restaurateurs push their teams to the limit.

“Supplier deliveries have also been impacted due to furloughing of supplier staff, meaning a five-day week delivery service is sometimes reduced to only two or three times a week. This creates another challenge for operators to ensure they have adequate storage to accommodate less frequent, larger deliveries or they have to change suppliers.

“New challenges continue to emerge, meaning businesses need to stay nimble and be ready to adapt. The prospect of further lockdown, whether it be national or local, may lead to a lack of customer confidence, which would further impact leisure and hospitality businesses desperately trying to recover.”

Whilst overcoming these challenges remains an everyday battle for businesses, Alex is keen to point out there are also some notable positives.

Alex continued: “Those with outside seating areas have benefited from the good weather, with customers feeling more confident to eat and drink in an alfresco setting. The Government’s streamlined licensing process for outdoor drinking and dining has helped more venues take advantage of this. While businesses are seeing the benefit of this now, in particular coastal businesses, it will be a long winter for many, so they have to make hay whilst the sun shines. Once the weather puts a stop to the outdoor dining, operators are then in the realisation that they have to run a restaurant with 35% less seats.

“Government schemes including Eat Out to Help Out and the VAT reduction have helped to give businesses the boost they need to get back on their feet. These incentives have been most welcomed by businesses and consumer alike, with 10.5 million meals claimed on the Eat Out to Help Out scheme in its first week alone.

“The introduction of new booking systems and ordering apps can help to reduce labour costs, while leisure activities that lend themselves to social distancing and offer outdoor attractions and activities are performing well, such as golf clubs and zoos.”

Regency Purchasing Group services more than 3,000 businesses across the UK and specialises in sourcing produce from various markets, locally, regionally, nationally and internationally.

This was posted in Bdaily's Members' News section by Regency .