by Matt Sweetman | 3 Sep, 2019 | Blog, Sales Figures
6.1% uplift in hospitality sales in August 2019.
According to analysis of more than 100 restaurants, pubs, bars, hotels and cafes that use S4labour software, sales of both food and drink were up 6.1% in August 2019 compared to August 2018. This follows on from a 5.4% uplift in like-for-like sales in July.
This month’s figures can be characterised by the impressive boost in performance for drink focused business, where the overall rise in sales was 9.6%, made up of 11.1% growth in drinks sales and supported by 3.5% rise in food sales.
Drink sales were also the driving force behind further positive sales figures in food focused businesses. A boost of 5.1% in drink and 1.2% increase in food sales meant that food led pubs delivered a 2.8% increase in like for like sales compared with August 2018.
As the summer months come to a close, this month’s sales figures paint not only a healthy picture for the hospitality industry in August but also for the summer holiday period, a trend that was also true of 2018.
August’s results are particularly encouraging for drink focused pubs, where like for like sales have slightly lagged behind the results posted in food focused pubs during 2019.
As attentions turn to Autumn and Christmas trading, hospitality providers will be looking to build on the momentum gathered over the summer, where despite interchangeable weather, plenty of positives can be taken.
by Matt Sweetman | 9 Aug, 2019 | Blog, Press & News
Why are the small companies more successful than big ones?
In the hospitality sector the progressive small companies are outperforming the large ones to a significant extent.While of course the hospitality sector is just as much about site economics as scale economics, I have long puzzled about why this is the case. As a software supplier (and a small operator of 3 sites) who therefore gets to talk to lots of operators, my thesis is as follows:
The advantages of the large operators (for which I am defining as 100+ sites) include many things such as focused marketing, category management, menu engineering, and analysis. They can also afford to deploy many systems and processes which require the scale of many sites. In addition they can often access more capital more cheaply and perhaps still also have the pick of the sites through the strength of their covenants. So, if they can design and create better businesses why are they not more successful?
The answers to this are less easy for the spreadsheet driven VC analyst to spot, and I probably need to justify them as I am sure there will be plenty who disagree!
1 – Focus. Where you have fewer sites you can give the site more attention. When I set up my own pub restaurant I was fearful of the might of M&B nearby. I still look at their pricing, but I know we can deliver a more relevant offer to the Range Rover drivers of Harrogate. I know my customers because I see them,and talk to them. We have a more conservative customer base and we design the menu for them and also to fit the gap in our local market. Another example is that we get lots of students working with us. This is great in the holidays, but a real challenge in May when everyone is doing exams. So we don’t allow team holidays in May, which is a complete departure from my training.
2 – Trust. I think one of the gentle, and hard to observe changes that occurs when you grow a business is one of trust. A small team trusts all its people to do a good job and supports them in delivering that. The management team know their strengths and weaknesses and supports them where they are poor and releases them where they are good. It is never one size fits all. A Head Office driven culture gradually develops a control culture that removes the empowerment of the teams and strips away responsibility. This is of course corrosive but is understandable where lowest common denominator procedures start to rule the roost. And of course we all know that if you treat people like children they will behave like children – or leave.
3 – Consistency. Consistency is a real brand challenge. I once went around ten restaurants supposedly all doing the same risotto dish. Over the course of my visits I encountered a multitude of ingredients and a multitude of cooking processes, all of course swearing that they had made it even better than the core brief. But how can you run a consistent brand and an inconsistent menu, let alone expect consistency from the people on the frontline, safeguarding your reputation, every shift? Great shift leadership is the solution, and it’s something that smaller operators focus on nailing. The only way seems to be to either dumb the menu down to a cook in the bag process (it’s a long time since I had risotto from a bag), or to have a collection of sites that have an individual identity, and not be phased by each chef taking a different approach. In truth this probably depends on whether you can automate the offer. MacDonald’s is very consistent, but it does give the opportunity for others to make a better burger.
My old boss and mentor, Tony Hughes, once said to me that he thought no brand should be larger than seventy sites. I didn’t understand what he meant at the time, but fifteen years on I think I do. The balance between the tensions above either require a different way of running our business, or they in effect reach an optimal level where trust at the site level is not lost, there is enough focus so that the MD know all the sites well, and a sufficient level of consistency can be achieved. I would like to think that the improvements in technology should allow this number to grow, as we can see more of what is important without being on site. It will be interesting to see if the outperformance of the SME improves or deteriorates over the coming years.
But we still can’t measure smiles, or an attentive team, or a plate of food that makes you excited. That still comes from sitting and observing. And that comes from the other secret ingredient. Passion.
by Matt Sweetman | 7 Aug, 2019 | Blog, Sales Figures
5.4% rise in food and drink sales in July 2019.
According to analysis of more than 100 restaurants, pubs, bars, hotels and cafes that use S4labour software, sales of both food and drink were up 5.4% in July 2019 compared to July 2018.
Both wet and dry led operations saw positive like for likes, but it was food focused businesses that performed particularly well. Overall, sales in dry led establishments went up by an impressive 8.3%, the largest hike in like for like sales in 2019. The bumper month was split evenly between growth in food and drink sales, up 8.2% and 8.5% respectively.
Unlike the same period the year before, the inconsistent weather may have been enough to deter many from lighting the BBQ and opting for an out of home eating experience instead.
Improved sales figures were also a feature in drink focused businesses, however the growth here was largely driven by food sales. Sales of food in wet-led pubs grew by an encouraging 5.2% compared to a modest uplift of 1.6% in drink sales. However, overall like for likes sales growth was a welcome 2.3%.
Like previous months, food sales, particularly in food focused businesses have been the stand out performers in the hospitality sector. This month was no different, however, modest gains for wet led operations is good news for the sector.
by Abby Henson | 23 Jul, 2019 | Blog, Press & News
Essentially, a tronc is an arrangement for the pooling, allocation and distribution of tips and gratuities. Leaving tips seems rather easy to understand – we pay a little extra on our bill and expect that money to be distributed to staff, right? Speak to anyone who processes tips fairly and consistently as part of an employees pay, and they will likely tell a different story.
Consider who has been a part of earning the tip – front of house / back of house / head office. Now consider factors such as credit card tips, deduction fees, the separate tax codes and PAYE references for employee’s payments. These are just a couple of reasons why the handling of tips can lead to mistakes. When HMRC come knocking, the consequences for getting it wrong can be severe.
As the waters between earnings and tips become muddier and HMRC cast an ever-closer eye over how hospitality businesses handle tronc, the role of a troncmaster is becoming ever more popular in the hospitality industry.
The troncmaster is the person or group that operates a tronc on the operators’ behalf. Having a troncmaster can ultimately save both a manager and payroll officer huge amounts of time and hassle, since all the distribution of tips, gratuities and service charges are dealt with by someone else. The ‘troncmaster’ is often extremely well equipped with knowledge on how to best deal with legislation surrounding the tronc system, as it can be rather cloudy and grey to properly understand the relationship between tronc money, employees, employers and HMRC.
Another reason why troncmasters are playing an increasingly popular role is a recent change in the rules on who can and cannot operate a tronc. While it is perfectly ok for waiters to arrange the tronc policy themselves, anyone who is a manager or above aren’t allowed to operate the tronc. The solution is to arguably hand responsibility to the 3rd party troncmaster.
Employees may benefit through yet another element of a tronc system, the tronc pot. Let us use the example of a friendly waiter who we will call Toby. Toby earns £8.50 an hour but also has an uplift of £11 that includes tips, but what would happen if the business didn’t make enough tips? Where would that remaining uplift come from? This is where a tronc pot really lives up to its role. Say on previous weeks in the year the business made an abundance of tips surpassing their overall uplift. This surplus of tronc could either be distributed to employees or enter a tronc pot, which is up to the troncmaster. Let’s go back to our previous example of Toby, who has a promised uplift of £11 an hour but didn’t actually make that much in tips for that given week. Through a tronc pot, a troncmaster can use these funds from a surplus of tips in one week to make sure an employee receives their uplift for another week, thus leaving our Toby satisfied.
The use of tronc is still a very grey area in the hospitality industry, but the benefits of a tronc system are really starting to become increasingly apparent and clear. S4labour can help facilitate the distribution of tronc to employees, saving managers the time and hassle of organising payroll to account for tips. S4labour can facilitate tronc on a daily and/or weekly basis seamlessly, again saving time for senior staff members in the hospitality industry. If you’d like to hear more about what we offer or have complex tronc requirements, please get in touch with us today.
by Matt Sweetman | 5 Jul, 2019 | Blog, Sales Figures
3.3% fall in like for like hospitality sales in June 2019.
According to analysis of more than 100 organisations that use S4labour software, sales of both food and drink across the sector took a hit this June. Tough trading condition coupled with lower temperatures, higher levels of rainfall and being compared to the same trading period in 2018 where the Fifa World Cup was in full flow, has meant many operators struggled to reproduce the same performance in June 2019 as they did in June 2018.
The story in venues where drinks make up the majority of sales was an overall drop off by 4.6%, compared to June 2018.
Food led business also saw a drop in like for like sales, however the impact was less acute. Food sales remained relatively steady with only a 0.3% decline, yet drink sales fell by 3.9%.
Food sales in food focused pubs have been quite resilient this year, while drink focused operators have experienced much more fluctuation and have been more susceptible to exterior factors.
by Matt Sweetman | 5 Jun, 2019 | Blog, Sales Figures
Drink sales drive a 1% rise in sales for hospitality revenues in May 2019.
According to analysis of more than 100 organisations that use S4labour software, a spike in sales at drink focused venues drove an overall 1% rise in sales across the sector. The latest sales figures show a resilient bounce back from Aprils sales dip and encouraging results for drink focused business going forward.
The success of British football clubs in the later stages of the Champions League this year helped push an overall 2.3% rises in sales at drinks business. While food sales slipped by 1.2% in drinks venues, there was a very encouraging uplift of 3.1% in the sale of drink.
The success in drink focused businesses was at the expense of some food focused establishments where there were slightly less positive results. A boost of 0.5% in food sales was not enough to stop an overall drop off of 0.4% in sales, owing to the decline of 1.5% in drink sales. The warm weather was possibly a factor in driving some diners to light the BBQ at home rather than eating out.
