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April Re-Opening Forecast

by | Apr 1, 2021 | Blogs, Sales Figures

Hospitality industry forecasts 70% of normal revenue to return when outdoor service resumes on the 12th of April.

 

Analysis from S4labour indicates that hospitality operators are forecasting 70% of revenue compared to the same week in 2019 (not 2020). The figure of 70% is somewhat remarkable considering that the vast majority of capacity, i.e. inside, will be unavailable. The research is also encouraging as the sector prepares to re-open with over a week left to secure even more bookings. 

 

The figures represent only sites that are preparing to re-open on the 12th of April and it is important to note that a large number of operators either have no outside space or not enough outdoor space to make opening feasible.

 

S4labour’s Chief Customer Officer Sam Wignell, commented “the figure of 70% of revenue compared with 2019 is in line with anecdotal evidence from conversations across the sector. There has been a scramble and huge investment to prepare outside spaces for the 12th of April, however, it comes with a large dose of caution as much of the pent-up demand could quickly be washed away with poor weather.” 

 

Alastair Scott, MD of S4labour and owner of Malvern Inns who operate 3 pubs, added “we have seen an unprecedented amount of bookings in all of our sites with customers showing a clear desire to meet up and start enjoying hospitality once more”.

Covid Hits Hospitality Sales for £89 billion 

by | Mar 23, 2021 | Blogs, Sales Figures

Covid Hits Hospitality for £89 billion 

As the grim anniversary of the beginning of the first lockdown approaches, analysis from S4labour shows that the hospitality industry lost just over £89 billion in revenue through the full year since March 23rd 2020, when the hospitality industry was first instructed to close. This is equivalent to 68.9% of annual revenue, representing an average decline of half a £million per site across the U.K. 

The data shows that while there were huge declines for both wet and dry led sites, it was drink led sites that were particularly hard hit, slipping 78.6% in like-for-like revenue compared to food-led venues where the decline was limited to 62.1%.

There was a less marked difference between London and non-London sites, however, it was noticeable that wet-led venues in the capital suffered an 84.4% decline in sales, with little opportunity to offer takeaway or delivery during almost all variation of restrictions.

Scotland fared worse than England, with a 77% loss in revenue, and wet-led pubs in Scotland were the most affected category with an 88% decline like-for-like revenue.

Chief Customer Officer Sam Wignell added, during the last year, hospitality has had its ups but the downs have been significant and scarring for most operators. The figures are starkly clear, we cannot expect the industry to simply emerge on the other side of that loss still afloat and recover, even with pent-up demand.

Labour Ratios

by | Aug 24, 2020 | Blogs

S4labour release labour percentages since lockdown ended

 Short story

 Industry Labour ratios increase by 10% in first month of trading as operators get a handle on new ways of operating and lower sales levels. Analysis from S4labour has shown that the labour ratio in July (from the 4th to the 31st) was 41.1% as compared with 30.9% in 2019. Richard Hartley, Chief Product Officer of S4labour commented “For the hospitality industry the last 10-20% of sales produces all of the profit, and so with the sales levels in July it will be hard for operators to make money. The added increases in labour will make that even harder. The change in consumer behaviour may well be with us for some time and those who adjust their labour model quickly and smartly will win the confidence of the customer, and therefore grow sales, and also enable them to manage costs appropriately through this very challenging time.”

Full article

S4labour, the labour management experts, have conducted a full review of labour costs for July since the industry re-opened on 4th July. This data only includes sites for days that were open from July 4.

In the first 7 days after lockdown the industry was running at an average labour cost of 65.9%. Sales were low and staff were starting back to work, getting used to new ways of working and doing their best to give customers reassurance that they were operating in a safe manner. This will have left nearly every operator making losses.

As the weeks have progressed this ratio has improved. Week two ran at 53.8% and week three 43.1% , with the final week in July running at 41.1%. This labour ratio compares with a ratio of 30.9% for the same period last year and therefore reduces industry profitability by a full 10% pts against the same period last year.

There are several causes for this:

1 – Lower sales

The lower sales levels have caused an increase in the labour ratio of a massive 6% points. This shows how vital incremental sales are to the industry and over time operators will need to rebase their rotas if sales remain at a lower level.

2 – A less productive business

Business have become less productive because of more outside service, more at seat service and Covid measures on cleaning and staff distancing, all of which have led to a decrease in productivity which S4 estimates to be 10-15%. And therefore accounts for a 3% pt increase in labour ratio

3 – VAT

Operators have taken different approaches with how to treat the reduction in VAT. For any that have chosen to not pass on the price reduction to customers this will have helped them to offset some of the other challenges. This will see an increase in productivity, as measured by sales per labour hour, of circa 10%.

4 – Sales uncertainty and volatility

When sales are uncertain and more volatile then typically more team are scheduled to cover sales that might not materialise. Slack, a measure of non-productive hours as measured by S4labour, has increased by 5%.

5 – Staff getting back up to speed and training

The industry has faced the double challenge of having both to re-train and re-energise staff as well as train new staff, and this will have undoubtedly contributed to the additional cost in July. While the government have offered to pay for training through furlough, less than 50% of businesses are using this facility. This is in part due to the challenge of determining what is, and what is not, training in the way we run our industry.

To summarise therefore the increase in labour ratio is driven as follows:

Sales decline                           +6%

Productivity decline                +3%

VAT change                             -2%

Sales uncertainty                    + 1.5%

Staff training                           + 1.5%

Total                                        +10%

Richard Hartley, Chief Product Officer of S4labour commented

“For the hospitality industry the last 10-20% of sales produces all of the profit, and so with the sales levels in July it will be hard for operators to make money. The added increases in labour will make that even harder. The change in consumer behaviour may well be with us for some time and those who adjust their labour model quickly and smartly will win the confidence of the customer, and therefore grow sales, and also enable them to manage costs appropriately through this very challenging time.”

 

For further information on this story please contact Richard Hartley, Chief Product Officer

richard@s4labour.co.uk

07766698442

Eat Out Sales Figures

by | Aug 11, 2020 | Sales Figures

Week on week sales jump 20.5% on the back of Eat Out Scheme.

Analysis from S4labour shows a leap in like-for-likes sales of 20.5% on last week. The figures also show that last weeks like-for-like sales surpassed the same week last year by 2%, the first week this milestone has been reached since before lockdown.
 
There was a marked difference between food and drink sales, with food week on week sales up 35.8% and drink sales up a more modest 8.3%. Looking at the figures from Monday to Wednesday (while the Eat Out Scheme was valid) food sales both inside and outside the capital were up a remarkable 132% on last week.
 
The analysis shows that there was both week on week sales growth last week and a bringing forward of sales to the beginning of the week, albeit with a 5.2% slip in Thursday to Sunday trading on the previous week.
 
Chief Product Officer, Richard Hartley commented that the figures are the first indicator of the effectiveness of the Governments Eat Out to Help Out Scheme, food sales have been slower to recover since lockdown measures eased and this is a welcome shot in the arm for operators.
 
The research also identified in the first week of the scheme, the average site participating in the Eat Out to Help Out Scheme gave a discount of £987.38 on food sales and £202.27 on drink sales, totalling £1,189.65.

Re-opening Sales Figures

by | Jul 17, 2020 | Blogs, Sales Figures

Like-for-like sales down 30% year-on-year in first full week of trading since regulations ease:

Last week we reported that like-for-like sales were down 33.6% year-on-year in first weekend of trading since regulations eased, this week we can report that the week that followed so called Super Saturday, were down 29.8% compared to the same week in 2019.

The research uncovers a split in the performance of sales of drinks and sales of food. Sales of drinks were down 21.3% while sales of food down 40.0% compared to the same week in 2019. While the figures had very little deviation when comparing sites that were inside and outside of London, the capital performed slightly worse on sales of food, down 43.0% (compared to 40% down nationally) while sales of drinks inside London, while still down, were only down 18.7% (compared to the national decline of 21.3%).

Analysis.

July the 4th 2020, the day the hospitality industry was allowed to reopen their doors to customers in England after been forced to close as a result of the Covid-19 pandemic. Not every operator decided to reopen and those that did, did so to mixed pubic press on the rights and wrongs of them doing so, a raft of new government guidelines and an unknown level of public appetite to return to eating and drinking out. Anecdotally, operators had relatively low sales expectations from the opening weekend and many would have been encouraged by sales that were up 13.3% in comparison with the weekend before lock-down (14th
and 15th of March), albeit down 33.6% year-on-year.

The most notable trend from the following week including the weekend was the continued decline of food sales. S4labour Chief Customer Officer Sam Wignell said: “In these very early days of reopening, it is clear that social distancing is going to prevent food led business from serving the same number of guests they previously would have, explaining some of the reason why food sales have declined more severely than drinks. S4labour Chief Product Officer Richard Hartley said: Huge efforts have been made to make eating and drinking out safe, this has inevitably had an effect on capacity. We are also seeing some degree of people dipping their toe back in the water with a drink out, perhaps holding off for a period before going out for a meal.