Independents face tough year against large chains

Independents need to differentiate themselves and keep an even closer eye on their margins as analysts predict overcapacity among large groups and branded chains could slow growth and pressurise like-for-like sales​ throughout the year, according to CaterCost's Ali Carter.

The costing expert said: "There has been a growth among [large] group operators and a drop in independent operators – this is a plus for all existing independent operators to fight back against the standardised menus of chain operators.

"Keep your menu fresh, imaginative and incorporate excitement and change with an amazing specials board."

Foodservice consultancy Horizons recently reported that growth in the eating-out sector was strongest in pubs during the past decade, with the number of pub restaurants whose food sales exceeded wet sales up from 2,600 in 2001 to 6,100 in 2014.

Weak position​

However, Horizons claimed independents were actually now "in a weak position" because larger operators could "play tunes on prices" and outbid them for new sites, it claimed.

In the face of these worries, stable profits would only be achieved through better buying practices and accurately understanding dish costs, added Carter.

"Reducing portion sizes to compensate margin would be a foolish strategy as consumers will be looking even more for value for money.

"Ditch the limited view that food and primarily alcohol are all pubs do. It's time to fight back and look at how you could diversify your retail offer."

The one advantage independents have is that their small size allows them to adapt to the changing market faster, said Andrew Fishwick, owner of London gastropub the Truscott Arms, Maida Vale.

"Large chains and groups are, by definition, slow to adapt - they are clunky, formulaic and reliant on the market remaining within the realms where they have perfected their operation.

"However, chains are not stupid. They may have been slow to move when the market shifted away from mass appeal towards the desire for character and quality but they have caught up and some of them are getting good at it."

He said he expected to see more chains 'de-branding' their offers in 2016 and acting more like independents.

"With the resources of larger organisations, this is obviously a threat to those of us who genuinely do these things as part of our DNA."

But, he said: "Chains find it harder than we do to create emotional branding. This is our strength and we must continue to strive to ensure that our pubs and restaurants offer much more than great food and booze. We must offer a connection with our guests that cannot be replicated."

Chef shortage​

Another worry is that an increasing move towards centralised menu development in the pub sector could be worsening the ongoing chef shortage​.

Distinct Pubs managing director James Penlington said: "The relentless growth among group operators – managed pubs and branded restaurant chains - has certainly helped to create the current high demand for chef services."

Research conducted in 2015 reported that the hospitality industry would need to recruit an additional 11,000 chefs by 2022​. However, 42% of current chef vacancies were already considered hard to fill.

"To fill these roles, recruiters have been looking outside the UK for some time now and in order for these companies to maintain consistency, portion control and profit margin," said Penlington.

Many chefs now complain that they are not cooking their own food, he warned, adding: "Menus are centralised and product, not produce, is bought in from suppliers."

This was of particular concern for junior chefs entering the industry who were unable to learn core skills and could be missing out on the creative side of dish development, he said.

The Publican’s Morning Advertiser ​recently held an exclusive round-table debate on the chef shortage for industry leaders, who agreed that more defined career paths and more realistic expectations of head chefs needed to be developed​ to attract and retain talent in pub kitchens.

You can watch video highlights of the debate here​.