How the world has changed in a year! When I look back at my restaurant and hospitality predictions for 2020 they seem to come from another world where we took for granted being able to pop to the pub or meet friends for dinner. As a society, we have come to recognise that restaurants, pubs and hotels help to fulfil the basic human need to connect with others and to shape social relationships.
Boom or Bust for restaurants in 2021?
If 2020 taught us anything, it’s that it’s impossible to predict the future, so the idea of making any predictions or looking at hospitality trends for 2021 seems like a foolish exercise. There are those who predict a boom in the hospitality sector in the second half of 2021. Jay Rayner wrote in The Observer in early January: “There will be a desire to spend, which has to be good both for the economy in general and hospitality in particular.”. In July and August after the first lockdown, people flocked back to support hospitality businesses, albeit gradually at first and encouraged by the Eat Out to Help Out scheme. As soon as it’s permitted and safe to do so, we can expect to see a pent up demand to eat out, meet friends for a drink and enjoy the warmth of hospitality again.
Yet, starting the new year in another full lockdown with expectations that it will last until spring, the hospitality industry faces enormous challenges in 2021 and is at risk of losing almost 50% of normal revenue streams and seeing huge numbers of redundancies. The British Beer and Pub Association and the British Institute of Innkeeping and UKHospitality have published findings that suggest:
72% of members expected to operate at a loss and to be unable to survive because of the collapse in trade.
Seven out of 10 UK pubs and restaurants fear they will become financially unviable and forced to close in 2021 as a result of damaging Covid-19 restrictions
By February 2021 there would be 750,000 fewer jobs in the sector compared with earlier this year.
The Future Shock report, from CGA and UKHospitality, outlines the difficult year for the pub, bar and restaurant sector and sets out the challenges and opportunities facing the industry into 2021 indicates:
A £53.3bn year-on-year drop in sales between the start of April and the end of September.
Falling consumer confidence, with 78% of British adults concerned about the long-term financial implications of the pandemic.
21% of consumers said they would eat and drink out less frequently than before
Hesitant business confidence, with 27% of leaders of multi-site groups predicting they will be unviable by mid-2021 with current levels of support.
insight from recent research commissioned by Marcus Wareing found that 34% of consumers expected to spend less when they returned to restaurants.
2021 will be about settling into a new rhythm and catering to diners in new and innovative way. Here are some of our predictions for the UK restaurant trade in 2021. Several of the predictions for last year seem even more relevant today than they did 12 months ago.
1. Home delivery and finish-at-home meals become the norm.
2020: We predicted that restaurants and pubs should do more to tap into the trend for home delivery with the potential to reach new audiences and increase turnover at quieter times. We wrote: “There’s particular scope for more sophisticated options from high-end restaurants. Yet operators will face a challenge to adapt to this fundamentally altered business model. “
Lockdowns forcing the closure of hospitality since March have forced hospitality businesses to switch their business model overnight to offer take-home meals in order to keep some of their staff employed and their businesses afloat. New businesses have sprung up, such as Restaurant Kits, to facilitate this trend without the high costs of delivery platforms like Deliveroo and Uber Eats.
2021: We expect to see more businesses find new revenue streams through diversification into take-home meals, cook at home kits and restaurant branded products on the shelves. With no end in sight to restrictions, taking the restaurant experience home or giving yourself a night off cooking, has never seemed more important. While there seemed to be some saturation in demand for home delivery/restaurant kits during autumn, we can expect to see growing demand in 2021 and the launch new platforms and technologies that make it easier for restaurants to improve systems for ordering and management.
2. The Rise of Ghost Kitchens
Until this year ghost kitchens where food is prepared and distributed, but no customers are served were perceived as a niche phenomenon in our cities. In 2021 they will become part of the next normal. While high rents in city centres are unsustainable more hospitality businesses and chefs will move away from the high street towards more affordable ghost kitchens. The beauty of a ghost kitchen is that it allows your operation to run leaner and meaner than ever before.
Before the pandemic, revenue for online food delivery in Europe was experiencing double-digit growth and was expected to exceed £19bn by 2023. In the UK, Foodstars, Jacuna Kitchens and Deliveroo are just a few of the third-party delivery platforms to have entered the game. Yet virtual kitchens are not just for the big operators, with kitchens offering hired spaces they can be a great stepping stone for new businesses in a similar way to businesses which tested a concept through a street-food offering, people will start a virtual kitchen first and then open a bricks-and-mortar site when the hospitality sector can open up again.
2. Provenance, Sustainability and tackling food waste
2020: We predicted an increased awareness in reducing the use of single-use plastics and reducing food waste and encouraged operators to demonstrate the steps they were taking to make improvements. The reality has been that we’ve gone several steps backwards and seen wide-spread use of disposable cups and packaging with take-away drinks and meals. The constant stop-starting of operations as lockdowns and closures have been imposed at short notice has seen an increase in food waste.
2021: With Brexit complete and increased customs tariffs the price of imported ingredients will increase and the importance of sourcing locally will become all the more critical. We should expect to see more British grown produce on our plates. Hospitality businesses will have to rapidly adapt their supply chains, their workforce and shift their long term planning. How they will do this is still uncertain, but many businesses will have to become more reliant on local communities and markets.
3. Eating for Immunity
2020: We suggested that consumers were likely to seek healthy options on weekdays and treat themselves at the weekend and that operators should offer healthy options as well as occasional treats.
2021: Immunity will be the new buzzword for 2021. The pandemic has caused us all to think more about how a good diet can improve our health and immunity. While heavily emphasing the nutritional value of dishes on your menu
4. Contactless technology everywhere
2020: Our 2020 predictions for the importance of technology have been critical this year to reduce contact and enable online orders. We predicted that consumers would more regularly use apps and mobile technology: “Technology will transform the way consumers order food and drink and to change how we book too. It’s clear that personal devices will play a critical role in the restaurant experience, from QR-code enabled menus, to mobile order-ahead options, minimizing contact is important to consumers and has effectively gone from short-term fix, to key priority.”
2021: There has been significant investment in developing new and improved technology to help hospitality operators improve safety for staff and customers and we will continue to see new apps and technology rolled out in 2021. Even operators who have previously been reluctant to adopt systems such as QR codes, remote ordering and contactless payment will be forced to implement these new technologies due to customer expectations. The aim is to make the entire process contactless, so consumers can feel safer and enjoy a convenient, hassle-free experience.
5. Keep engaging with your customers
With prolonged closures and constant changes to rules and restrictions, hospitality operators have been forced to communicate regularly with customers whether through social media, email newsletters or PR. If the experience you offer your customers is one that makes them feel looked after and treated when they visit your pub, restaurant or hotel, it follows that you need to continue to do this even while you are closed.
While the pressure facing operators for both time and budget means it’s all to easy to put marketing down as an unnecessary time and cost, it’s vital that you continue to communicate with your customers (current and future) and maintain an emotionally rich and engaging relationship with your followers.
The most successful hospitality businesses that will emerge from the train wreck of 2020, will be those who understand the emotional connection and use it to bond with their customers. Marketing at its best should be honest, empathic, generous and authentic. It combines brand building with narrative to develop your business into a character with its own personality – one that customers want to see progress and support through the challenges that 2021 holds, and whose story they want to be a part of.
6. Family-friendly dining
2020: We suggested that restaurants and pubs should review their family-friendly dining options, while not necessarily offering children’s menus, but making the experience as welcoming as possible to parents and children. With restrictions on meeting and dining with people from outside your household, restaurants became dependent on bookings from single households and bookings from families have become all the more important.
2021: While it seems unlikely that we’ll be able to dine out with friends and colleagues in the first half of 2021, restaurants and pubs must develop ways to appeal to families and give people a strong incentive to dine out, when permitted, to celebrate family occasions or just for a break from routine.
7. Eat and drink local
City centre footfall is at an all-time low, even during periods when restrictions have eased, office workers based at home and no international tourists, town and city centre venues have taken the biggest hit during the pandemic, while restaurants and pubs in residential areas and the countryside have been supported by customers staying local. While footfall may increase in our cities in the second half of 2021, consumers will remain inclined to stay local and support businesses on their doorsteps.
This is a real opportunity for community-based businesses, which are often independent operators. To survive operators must may more attention than ever to their local audience and not rely on attracting customers even from the other side of the city. With many vacant spaces and potentially lower rents, as landlords look to fill their properties again, this also creates new opportunities for brave start-up businesses, chefs going it alone for the first time and entrepreneurs who’ve been held back before by the high costs of starting a bricks and mortar business.
8. The return of warm hospitality
Even when open, the need for strict hygiene measures, social distancing, and rules on household mixing, have put hospitality operators under huge stress and required them to prioritise policing the rules over offering warm hospitality and personal connections. The requirement to wear face masks and, in some cases, the introduction of contactless ordering and payment has taken away so much of what customers love about going out to eat and drink and the reason why people love working in the industry. In the short periods, restaurants and pubs were open in 2020 we all had experiences of overly officious and understandably stressed staff, being a bit abrupt and sometimes plain rude.
Yet we all crave the warmth of human contact, a bit of friendly banter at the bar or with the waiter, or some nosey people-watching of the next table. Restaurant and pub operators who can find ways to inject the usual warmth and conviviality into dining out will be the first to bounce back. It will be vital to give staff the training to manage any rules or expectations with grace and charm and to look for those extra touches which make the customer feel welcome and valued.
