by Alastair Scott | Aug 27, 2025 | Thought Leadership
Central kitchens have, I think, become a dark (no pun intended) secret of our industry. We somehow believe that it reduces our credibility if we admit that we use a central kitchen to produce some of the items for our menu. But really, there are several great reasons to have a central kitchen – or even use one of your kitchens, if you have multiple sites.
The first reason is quality. If one person knows how to make a difficult dish really well, then why not get them to make it all the time? If someone is an ace at making brownies, they should make them for everyone, because the guest will notice. And the same goes for fish pie mix, or for the marinade for ribs, and maybe even the cooking process too. Even now, this makes my mouth water – I love ribs. But of course, there is a downside. If the whole fish pie is made centrally, then perhaps the fish pie will turn mushier and the fish will fall apart if it is cooked twice. I think the best fish pie has raw fish added to the mix and then cooked fresh.
So, we have to be really careful about what is made or cooked centrally, and far more importantly, what isn’t, based on the value equation for our business. That is the risk; the perception is that the central kitchen is taken too far, and rather than quality being enhanced, it is reduced. After all, time can be either an enhancer of a dish or a destroyer, as we all know from eating our stew or bolognese on day two.
Our real challenge is how to communicate our kitchen processes and practices well enough. And so, in truth, if we haven’t communicated at all, what’s the point of them? I think we could do a better job and take this on in a positive way, by naming the chef and showing him at work. Social media could make a real difference here, and I always think it is better to find a positive way to deal with the PR, rather than letting a cancerous negativity pervade. There is a chain of quite high-end restaurants in Harrogate that has lost the battle on central kitchens. All rumour, but there is nothing to counteract it.
The second reason is consistency. If a dish is hard to make, then why not do it in one place? For those chains that require consistency for the brand values, then it is essential. I couldn’t imagine McDonald’s making their burgers on site or cutting their chips. For some, of course, the requirement for complete consistency is not an issue. It is expected that each chef might want to do things slightly differently. But even then, if you like it one way, you will probably be disappointed. I prefer my rib falling off the bone!
The third is people cost. There is a significant saving in cost if you can get this right. You can buy expensive kit and use it far more often if you are doing it in one place. We don’t really want highly paid chefs chopping onions the old-fashioned way if we can help it. You can make batches of dishes that take little more time to do in large quantities than in small ones and so gain big economies of scale. And naturally, labour costs may be lower, as kitchen staff may not require traditional chef training – they’re primarily operating machines.
The fourth reason is premises cost. When rents are sky-high in city centres, why would you want to use that space for kitchen prep if it can be done in a cheaper location elsewhere? It is best to have more covers and drive greater sales. This could add, say, another ten covers to a 100-cover restaurant, which is a significant sales growth opportunity.
For the smaller brands, there are versions of this that can be utilised. Items could be prepared in one kitchen for the group, for any of the above reasons. You don’t have to have another premises. We need to do this anyway for our wedding and outside catering business, so we are learning how to do it.
I think we need to get on the front foot in our industry about what we do where. Any hint or rumour of a central kitchen will draw us closer to the M&S comparison. And if we drive the positives, both cost and revenue, then we can, and will, make our industry a better one.
Alastair Scott is the owner of Malvern Inns and chief executive of S4labour
by Alastair Scott | Jul 11, 2025 | Thought Leadership
We have just concluded an investigation by HM Revenue & Customs (HMRC) into minimum wage compliance at our small group of restaurants. The investigation has taken nine months, with HMRC conducting a very thorough and intense review of our whole business. HMRC looked at payroll records and rota records to check that what was on the rota was actually then paid.
Officials interviewed staff to check that the times on the rota were the actual times worked, and that we weren’t removing worked hours. HMRC fully investigated all of the areas where it hoped it might find something wrong. Did we uplift to new rates on the right date? Did we uplift rates when people moved age brackets? Did staff provide their own workwear that required us to pay above the minimum wage? Did we correctly pay people when they moved from hourly to salaried?
It felt a bit like being followed by a police car; you think you are doing everything right, but then start to doubt yourselves the longer the police car follows you, thinking through everything you might be doing wrong and conducting a mental checklist. Over the course of the investigation, we started to doubt ourselves and thought we might have overlooked something. Had we paid people correctly when they transferred between sites? Were our contracts correct about the place of work? Had the S4 system worked correctly in all cases, or had we incorrectly put someone’s birthday into the system and underpaid them? All those things kept us slightly worried.
I understand that HMRC investigations are often triggered by reports from former employees. Of course, these reports may stem from genuine concerns or misunderstandings. While we can’t be certain of the reason behind our investigation, we approached the process with full transparency and, regardless of the origin, it served as a valuable opportunity to really test our compliance system.
I was, of course, very relieved to finally get a clean bill of health after its latest rounds of checks. Given the time it took, I had half expected HMRC to never close the investigation and leave us nervously hanging in the air forever. It was clearly very disappointed. I think from the way the officials behaved, they normally find an error somewhere, and they know where to look. Without a system, I would be sure that we would have missed a birthday somewhere, which I think would be the most likely error.
But the way officials looked at any change from hourly to salaried suggests that this is also a common place for operators to fall. The time they spent checking that the rota’d hours worked were the actual hours worked by the employee also suggests that is a difficult area for our industry.
The fine structure for any failure is a maximum of £20,000 per worker, and any errors investigated need to be paid back over the six years HMRC can go back in its investigation. I assume that when it finds one fault, it will then look at whether that fault is repeated across the whole employee base. The minimum fine is £100 per employee, but even if you have, say, ten employees and a staff turnover rate of 100%, then over six years, you may well have had 60 staff, so you are already at £6,000. Scary stuff.
So, what are the actions we can all take? Never having an aggrieved worker seems impossible. We will all typically take on someone who doesn’t work out and is unhappy about being dismissed, so really it is about having excellent process and procedures to ensure that the legislation is complied with.
I am interested in how HMRC might determine any failures in hours worked versus hours paid, but luckily, we won’t get to find out. As the minimum wage increases, a higher proportion of staff will be paid the minimum wage, and as such, our risks and potential fines go up. I hope HMRC won’t be back to visit us soon, but hopefully this may serve as a reminder that we all need to make sure we have all the right checks in place.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns
by Alastair Scott | Jun 30, 2025 | Thought Leadership
I am sure many of us feel very proud of doing the paper round. We got up early, worked for a couple of hours and then went to school. I remember always helping to milk the cows on Christmas Day. I think working when you are young is good for everyone. For one, it makes us understand money; £5 is just something your parents give you until you have to actually go and earn £5. Then, that £5 earned turns into an equivalent number of hours.
You now judge what you buy based on a value equation in hours worked. Was that extra McDonald’s in town worth an hour’s work? Maybe, or maybe not. One of our young workers bought herself an £800 handbag with the money she earned over Christmas – that’s not in my value equation, but clearly in hers.
Working young also teaches us to be on time. Too often, we run late, and too many parents I know tear their hair out trying to get the kids ready for school. Maybe working in hospitality is the same, but I think it teaches our youngsters that to be prompt is important. And, of course, they have to be well turned out too.
Another big lesson it teaches us is to relate to other people. Talking and asking questions of a wide variety of people, both customers and staff, is good for everyone. With loneliness being such a great problem among both old and young people, learning how to relate to others, start a conversation, look interested and be part of a community is essential.
And of course, it is the start of our working journey. The sooner we get going, the better. Developing a work ethic is so important for many people, and I struggle to see the benefit in delaying it when people are ready, and willing, to step into the workplace.
But look at the legislation on young people working – the main issue I have is the distinction between a Saturday and a Sunday. Young people can work a maximum of five hours on a Saturday and only two hours on a Sunday, even in school holidays. I understand the legislation about two hours on a school day, but on a Sunday, it doesn’t make sense.
I think it must have been written when children went to Sunday school. Even on school days, there are more strange rules. You can work for two hours a day, but not between 7am and 7pm. This suggests that it is good for a child to work 8pm-10pm rather than 5pm-7pm. I’m not entirely sure I agree.
At our sites, we have parents who are really keen for their children to do a four-hour shift on a Sunday. They recognise the value the children get from the experience. The kids love it too. I really can’t believe how much they enjoy their work and the people they work with. It’s also giving them a sense of independence – even if their parents still have to drop them off and pick them up.
Quite a few of them now have a whole new social life based around their fellow workers at the pub. Often, I see them popping in when they aren’t on shift because they want to catch up with their friend (hopefully after the shift, but not always). I was talking to one father about his daughter working, and he said it has grown her self-confidence massively. I, for one, am convinced that this is doing the children a world of good, and their performance at school will improve too.
I have looked for any evidence of whether working while at school helps or hinders achievement. I think all the studies are really short-sighted – they tend to look only at educational achievement and not whether the person ends up in work, or any measure of post-educational achievement. They do not look at light work and are skewed by those who need a full-time job to be able to afford their education.
This is a completely different case. It also, as we do much in society these days, removes any personal responsibility and parental responsibility. As parents, we can’t be trusted, it seems. Of course, I understand the exploitation argument. But I am sure there are ways around protecting the small minority without constraining the majority.
The sad thing is rules like this never seem to get looked at. There is little political capital to be gained, and it would take an awful lot of effort. Therefore, we are stuck with it. I wonder how many other instances there are of this.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns
by Alastair Scott | Jun 16, 2025 | Thought Leadership
We are a diverse industry in every way. With a licensed trade market of around 100,000 sites, and a licensed market of another at least 100,000 outlets, we are massive. We have sites in every town, many villages, and in most communities; whether we are a morning coffee shop or a late-night bar, hospitality is everywhere.
As a result, we need team members available around the clock. Most importantly, we need people to work during the times that suit our customers best. Unlike other places that dictate when they must engage in an activity, we are based entirely around when our customers want to come. This means we operate all day and all night in one guise or another and figuring out the mix of staff we need, and when we need them, is one of our biggest challenges.
It has always been the case that we have a mix of people doing different hours. In one of my own sites this week, we have 6 people FOH doing full time hours, 6 people doing between 12 and 25 hours, and 9 staff members doing 2 shifts a week or less. BOH is more extreme, with 4 doing full time hours, 1 part time, and 6 doing less than 2 shifts a week, in other words, our ‘one shifters’.
For us, all of the one shifters are working between Friday evening and Sunday evening. If we had any more full timers their hours would be wasted, because we would put them on midweek when we haven’t got the sales to support them.
We are very lucky with our one shifters. Many of them start with us while they are still at school and have parents who want them to develop a great work ethic early in their lives. A few of the parents often time their Sunday lunch booking to pick up their children at the end of their shift. I think they like seeing them hard at work. It has really developed a sense of community for our group of one shifters, who all love their job and have new friends and therefore want to come to work.
Most of them end up going to university, which means we hope to have them for at least 5 years; from their last two years at school, through to gap years and university holidays. We flex up their hours over the busy Christmas period and over the summer holidays, which is important for us.
The other added bonus for one shifters is pay rates. When fully costed, someone earning the new National Minimum Wage (NMW) will cost £16.10 per hour, which is 32% higher than their base pay rate. However, a single-shift worker on the NMW will cost just £13.90 per hour—resulting in a savings of over £2 per hour. Similarly, someone earning £10 per hour will cost £11.20 as a single-shift worker, creating a savings of nearly £4 per hour simply by working under a single-shift arrangement.
So, the question here is, do we continue doing what we have always done, or do we start switching some evening shifts in the week to one shifters? Historically, these shifts have been staffed by full timers, but if we can make this move, we will have a substantial saving.
But what about quality, I hear you cry. How do we ensure our one shifters are just as skilled and effective as full-timers? After all, saving 30% on staff costs is irrelevant if it compromises guest satisfaction or reduces sales.
We are fortunate; our length of service for our one shifters is actually better than full timers. And yet, the quality of the team is just as good. Of course we have people, both full time and part time, who go off the boil, but that is the same anywhere. Training might take longer, but this is because they are only doing one shift a week, but training what you would achieve in one week with a full timer still requires the same number of shifts. The real point to consider is whether or not they have forgotten everything since they learned it the week before. It doesn’t always happen, but if they do, then perhaps it is right to cut your losses, unless you can find them a job that requires less skill.
But that aside, moving the mix of our team could be one of the solutions to the combined NI, NMW and pension challenge. I think it is worth giving some thought to!
by Alastair Scott | May 2, 2025 | Thought Leadership
This week, I had quite a disappointing conversation with an operator. He didn’t make that much money and lived above the pub, taking out around £200 a week. We sat down together and went through his numbers after April’s increase in national insurance (NI) and national minimum wage. All of his profit was going to be wiped out; something that many of us will face. Sadly, it feels like the standard at the moment is cost increases are equal to current profits.
Even worse was the fact that he didn’t believe he could do any better at running labour; he did not see any efficiencies in his business. With this mindset, he likely will fail in the next 12 months – it is depressing and sad, but unfortunately, without spurring ourselves to get better, it will be the truth.
I would say that the current environment is probably going to be the hardest we have faced for a while. Was 2008 as bad? Or the smoking ban? At the time, I was working for a big corporate, so perhaps it didn’t quite feel the same. Right now, we need to be our best and at our bravest; we need to try things that we might not like as much.
You’ll be pleased to hear that with some persuasion and encouragement, we did manage to produce a plan with this particular operator to get him that extra £200 a week, so I thought I would share it with you all.
Top of the list was taking on single shifters. I speak about this quite a lot, as it is something I am a big fan of in my own businesses. When you bring on someone for a single shift, they will still fall below the NI thresholds, so you will immediately save 15% of wages, which is around £2 an hour. But single shifters are not just good for cost; they also typically only work when you need them, either seasonally or on a specific day of the week. In my own sites, Sundays close 30% of the sales for the week, so they are vital. We do not need more full-timers; we haven’t got enough hours in the week for them. Part-timers and single shifters are great for effective deployment and cost.
The second thing we focused on was managing to a cost. One of the major opportunities and improvements that many single sites can make is to know what they are planning to spend before the week starts. On-costs of NI, holiday and pensions add up and can vary significantly by employee, so it is becoming increasingly important to know what you are planning to spend before the week starts. As the adage goes, what gets measured gets managed. Once you know what you are going to spend for the week, you address some of the more marginal shifts and start and finish times.
Plus-one management was the next idea we looked at. Many owner-operators run their business by having themselves as an extra rather than being part of the shift. This is an expensive way to run the business, and probably also an exhausting one if you feel like you have been at work but haven’t been required, and yet have still been on the floor. Surely it is better to be a part of the shift and work in it. It requires the best sales forecast you can make, and then to add yourself in as part of the team.
So, three things to help get profit back to required levels, and maybe more. But as always, it is about changing the habits, which is difficult to do. Planning is one of the inescapable habits in our industry. I am a planner by nature, so I can never understand those who don’t like to plan, but it is a habit that many people avoid doing.
Whether it is changes for the business, financial planning or seasonal planning, it is crucial. Once we begin planning, we can also plan to change certain habits: looking at the week ahead, knowing what your cost is and changing from plus-one management are all key habits to have.
Many can proudly pat themselves on the back and say they do all of these well. But that doesn’t mean you shouldn’t challenge yourself to get even better. We’re facing one of our biggest challenges yet, so I can’t think of a better time to do so.
Alastair Scott is chief executive of S4labour and owner of Malvern Inns
