2021 UK Restaurant Trends and Predictions

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.

Hopes & Fears for Hospitality in 2021

At this time of year, I usually publish my restaurant industry trends and predictions for the year ahead, but if there’s one thing that this year has taught us, it’s that it’s impossible to predict the future, or even the next month.

So, here are a few thoughts about hopes and fears for the restaurant and pub trade in 2021 from my clients and colleagues in hospitality.

Piers Baker, The Sun Inn, Dedham and Church Street Tavern, Colchester:

“I believe 2021 is a major opportunity for a reset of our industry so that the dire straits we found ourselves in March won’t be repeated. What needs addressing? The beer tie, upward only rents, better landlord/tenant relationships, business rates, VAT and insurance. Every hospitality business knows it, the government must (more reason for a Minster of Hospitality). Sustainability, health and a better understanding of the importance of food in our diets for our ability to combat disease. This must start in schools but our industry can play a massive role in this. From employment, partnerships with education, understanding and sourcing of food.

Mid-March, our financial year ending June 2020 was on track to be our best to date. Lockdown meant it ended up being our worst. But the way our customers have reacted since July has given me great hope for 2021 once restrictions are lifted for good. I have taken greater steps to be financially leaner, using technology to make us more efficient, paying suppliers earlier, creating a financial backstop. There is still 3-4 months of hardship and unknowns ahead. Beyond the annoyance and frustration of the government, I do feel hopeful, we will survive and thrive.”

WIlliam Griffiths, The Angel Hotel, Abergavenny and The Walnut Tree Inn:

“We weren't surprised to learn of a new lockdown being imposed in Wales, having seen the cases continue to rise over the past few weeks, despite the additional hospitality restrictions which have been in place. It would be useful to have more clear communication on how long this is expected to last, as the current review every three weeks, means we will have to second guess decisions again, in order to try and give customers and suppliers notice for either reopening, or further cancellations. We already know it's not feasible for us to operate under the alert level three restrictions, therefore, realistically don't expect to be able to reopen now until the Spring.”

Peter Lloyd, Sticky Mango, London:

“It’s difficult to have a balanced point of view when you're trying to save your business. It goes without question that we have to put the safety of our staff, guests and public first, but there needs to be a more targeted approach to how we contain the virus. The reality is we are being denied the right to protect our businesses and livelihoods and not being supported enough by the government. The new grant scheme just doesn’t do enough to cover the fixed costs of rent, utilities, pension and NI contributions let alone the costs and wastage of having to reopen, close down, reopen and close down again. There is no doubt this is a tragic time for all involved but if we don’t get more support we just won’t be here when the dust has settled and the economy needs us all to perform to bounce back. With differed VAT bills due, bounce back loans to repay and forecasted business it’s really not looking good for 2021.”

Brendan Padfield, The Unruly Pig, Suffolk:

“Just as we thought the UK may be turning a corner, I am nervous as to what setback may be caused by the advent of a mutant strain of COVID-19. The hospitality industry is on its knees. If we are going to be able to sustainably support two million-plus jobs as the third largest sector employer, continued government support via a rates holiday and a 5% VAT rate is critical.

COVID-19 has brought out the very best and the very worst in people. My fear for 2021 is that some of the discourteous, selfish and abusive behaviour towards some members of my team and others in hospitality has now become ingrained in society. My hope is that the acts of kindness, loyalty, support and encouragement shown by the majority of customers will continue in abundance. My belief and firm conviction is that it will.“

As the vaccine means that by the summer, things should be getting back to something more normal, I hope that eventually, we will get back to what we love doing - delivering lovely food, great service and making our customers smile. That is why we do what we do because there is simply nothing better in life than the buzz of a busy restaurant s full of happy customers. But will summer 2021 see a downturn in comparative trade as all the benefits of ‘Staycation 2020’ evaporate with larger numbers of customers than normal choosing to holiday abroad?”