Let’s Look Beyond the Headlines

Opinion article by Mark Bentley, Business Development Director at HDI.
Reading some of the recent headlines in the mainstream media, you’d be forgiven for thinking that we’re all staying at home and no longer going out to pubs, bars and restaurants. As the cost-of-living crisis grips the nation, we’re all entertaining at home and spending more time sat on our sofas thanks to new seasons of TV shows such as Succession and Ted Lasso.

Thankfully, the reality is very different, and there’s a need to look beyond the lazy headlines to really understand what’s happening in terms of customer behaviour.

Hospitality has faced unprecedented challenges in the last few years, from the pandemic, with its periods of enforced closure, trading restrictions and general uncertainty, to the cost-of-living crisis that we’re now currently facing. Along the way there’s certainly been some bizarre moments, such as the debates over whether a sausage roll could be classed as a substantial meal!

I’m sure most of us will hope that the challenges of the pandemic years are firmly confined to the history books, but it’s worth taking a moment to reflect on what’s changed since those pre-covid days and to what extent the world that we’re living in now is genuinely different.

Out of necessity, the use of technology accelerated rapidly, with employees leaving their offices and adopting systems such as Microsoft Teams, with enforced working from home demonstrating that many roles could be fulfilled just as effectively remotely rather than always being based in a traditional office environment.

Delivery services saw a rapid rise, including the phenomenal growth of Amazon for anything and everything that you could possibly ever want to buy from physical shops, whilst delivery aggregators such as Deliveroo, Just Eat and Uber Eats all experienced significant sales growth as we were confined to our homes and opted for the convenience of eating-in when going-out wasn’t an option.

When pubs, bars and restaurants re-opened and were legally required to offer table service, technology was a key part of the solution, with order and pay apps proliferating and the unexpected renaissance of the QR code! In terms of drinks choices, pubs, bars & restaurants saw a huge shift in their drink sales mix, with premiumisation trends accelerating and categories such as World Lager enjoying meteoric growth whilst Cocktails, Shots & Bombs all enjoyed a significant upturn in sales.

Many of the changes that happened during the pandemic can be regarded as “accelerated trends,” and I would see all the examples above sitting under this.

However, it’s fair to say that there’s subsequently been a degree of normalisation at play, with things settling down but continuing to trend ahead of pre-pandemic levels.

Many of us have returned to working in offices, but hybrid working arrangements are now far more common than they were previously. Amazon delivery vans are ubiquitous on our streets, but their sales softened in 2022 as life returned to “normal,” whilst remaining way ahead of pre-pandemic levels.

For food delivery, we see a similar pattern, with our HDI panel data for the 12 weeks ending 18/4/23 tracking the debit and credit card spending of 10.2 million unique customers showing that Delivery now represents nearly £12 in every £100 spent in hospitality, up from just over £6.50 per £100 pre-pandemic.

In pubs, bars & restaurants, order & pay apps and QR code based ordering systems are now far more readily available than pre-pandemic, but their usage has dropped off markedly.

Many people like the convenience of being able to order & pay from their table, without having to queue at the bar or wait for table-service, but the ritual of ordering at the bar is something that many of us love.

When it comes to drinks choices, there’s been an expected slowdown in cocktails, shots & bombs sales, but premium choices are still very much the order of the day, even in the midst of a cost-of-living crisis as demonstrated by the continued phenomenal growth of World Lager brands like Madri Excepcional and Birra Moretti.

Reflecting on the last few years, it’s clear to see that there has been lots of changes, but in many respects not much has changed.

We may be facing some significant headwinds currently, but if we can take anything from the last few years, it’s that we’re social beings and we have an innate desire to want to spend time with others… and this is where hospitality well and truly comes into its own, delivering experiences that you simply cannot get at home.

Let’s look beyond the headlines, properly understand how customer behaviour is changing and focus on how we can ensure that hospitality continues to give people reasons to visit.