Ask Arena

Out of home - the next phase

The Ask Arena virtual event, Out of home - the next phase, saw CGA look at the latest consumer research combined with multiple CGA data sources to understand the current state of the market, what consumers want and how the market is evolving to help attendees inform and build their strategy with actionable insights to win in the out of home. CGA's Peter Martin also led an interview with the Founder and Chairman of Oakman Inns, Peter Borg-Neal, to get an insight into how the business is faring in the new norm. 

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Event Review

As the hospitality industry enters a new phase, we welcomed Fiona Speakman, Client Director Food and Retail team and Peter Martin, Vice President of CGA and Peter Borg-Neal, Founder and Executive Chairman of Oakman Inns in our sixth #Ask Arena webinar, in partnership with William Murray PR & Marketing and 23 Digital.

The webinar opened with fascinating research from CGA, presented by Fiona which looked at the current climate, consumer insight and actionable insight:

Current climate

The market is beginning to re-engage.  All venue types are showing growth in footfall and food-led pubs are showing the highest recovery rate. Reassuringly, the rate at which consumers are returning to pubs, bars and restaurants is increasing exponentially.  The Eat Out to Help Out scheme is playing a key role and over a quarter of the UK population had used the scheme by 11 August, demonstrating that it is driving footfall, as intended.  Despite criticism that the scheme could discourage business at the weekend, three in four consumers are just as likely, or more likely to eat out at the weekend.

While 55% of consumers have returned to the market, 37% of consumers have less disposable income.  The biggest challenge for operators – and in turn, suppliers – is the uncertainty around consumer demand. In response, 36% of operators are planning to keep some of their sites permanently closed and 82% plan to cut back the food offer to just core items.  This provides a real opportunity for suppliers who can support on menu innovations, planning and design. Confidence in supply is high, meaning there is an opportunity to capitalise on good relationships.

Consumer insight

The market’s most valuable consumers have already returned to the market and there is currently little sign of the purse strings lightening.   Supporting local is a key movement, with 50% of business leaders expecting an increased desire.  To date, consumers have been supporting local businesses with takeaway and delivery service, recommendations, vouchers, donating funds and shopping for groceries. This loyalty is continuing as the industry reopens, with 41% of consumers making just a 10-20 minute journey via transport to eat out. 

The weekend still plays a key role in consumer habits. But, only 7% of town centre residents visited venues in city centres. Bars remain a key concern.  This is driven, in part, by 58% of consumers now working from home.

How to navigate the uncertainty

So, how can this research be used to shape strategy and approach for suppliers?  Fiona gave a few key pointers:

  • Maintain awareness of operators’ ongoing challenges.
  • Consider where you can offer additional support to strengthen the relationship beyond the transactional.
  • Suppliers who support with best practice and practical product ranges will be more important than ever before, as operators work to restore consumer confidence.
  • Consumers are staying local; suppliers need to consider this within their communication and product development.
  • Delivering a hygienic but high quality offer will help retain customer engagement.
  • Experience is still key and consumers expect operators to deliver on this.
  • Agility to respond to the ways the market is changing is crucial for operators and where they most need support.  These areas include; increased focus on delivery, diversification of offer, reaction to local lockdown and increased use of technology.
  • Information on product hygiene, understanding provenance and supporting operators with readily available information is what they need to succeed as the market opens.

The event then moved on to Peter Martin, who interviewed Peter Borg-Neal on what life has been like since he made the public announcement that Oakman Inns would open for business on 4 July.

The 28 food-led sites, mainly in the home counties with a few sites West and North of the M25, are doing well. In fact, they’re 18% up on last year.

Peter puts this down to a number of reasons including the large outdoor areas that are being further developed with semi-permanent structures, the right locations (suburbs), bringing in Eat out to help out early, to ensure both the sites and customers were well prepared and the government support in terms of VAT and business rates.  Of course, Peter has a been a voicebox for the sector whilst campaigning on behalf of UKHospitality, which has also raised the brand’s profile. Since reopening, they’ve increased the workforce by 105 people and will be paying a bonus to all staff in line with the job retention scheme.

Nervousness has been combatted by putting measures in place that don’t deflect from the experience, such as glass (rather than Perspex) screens between tables, where it’s not possible to implement distancing.  Peter thinks some of these measures will remain in place after the government has given the green light to return to ‘normal’.  They enhance the customer experience. Whilst people will eventually want to return to stand at the bar, for now, customers are enjoying being served at the table and the privacy that social distancing rules create.

The Eat Out to Help Out scheme has encouraged new customers to try Oakmann Inns, whilst many suburban brands remain closed, but Peter has also noticed that regulars are using the sites more frequently, with some visiting three times a day. Historically, the brand has steered away from discounting but Peter “changed his mind when the facts changed” and is extending the offer.  He also believes that paying less to eat out during the week, could become part of a long-term pricing strategy, for many eating out businesses.

Consumers are staying local.  Thanks to its suburban locations in affluent middle class areas, Oakman Inns is in a position to capitalise on this fuelled by many customers now working from home.  Eating out for special occasions locally is also on the up, as consumers steer away from travelling into London.  His view is that current conditions will continue up until December and there will be a gradual shift back into town.  London always recovers, but this time, it’s likely to be a slow and painful recovery.

Peter also praised and thanked suppliers who have been working in partnership with operators, to help get the industry back on its feet.