It’s been ten years since Tom Kerridge launched his first cookbook – Proper Pub Food – and it’s a completely different playing field in the pub industry as his next book Pub Kitchen rolls out. We caught up with Tom ahead of the book launch to discuss the challenges facing pubs in the next year and what they need to do to survive.
HOW BAD IS IT FOR PUBS AT PRESENT?
Pubs are being hit from all sides and I honestly can’t see any light at the end of the tunnel yet but that doesn’t mean we won’t come through it. Food inflation continues to make it extremely difficult for chefs but it’s not just ingredients. Logistical costs, gas for the cellar, dry store goods, cleaning and hygiene products such as blue roll – every single item that is vital to a pub business has seen a price increase. Then of course there are energy costs too.
HOW DID YOU COPE AS A BUSINESS WITH THE ENERGY PRICES?
We were coming out of our energy deal last summer and the first quote we received was a 600% increase, which just wouldn’t have been sustainable. It’s honestly a terrifying position to be in. The options were sign up to an astronomical long-term deal or gamble month to month while praying prices don’t rise further.
We decided to take the risk and buy month to month via Advantage Utilities who have been great. In the end, we have probably seen an increase of around 300%, which is still absurd but obviously more manageable. Other landlords and businesses probably didn’t want to take the gamble so are locked into deals.
WHAT ELSE IS CAUSING LANDLORDS AND OPERATORS IN THE SECTOR SLEEPLESS NIGHTS?
Staff shortages are also wreaking havoc in pubs and the wider hospitality sector. For pubs desperate to adapt and be creative to make some money, many are not able to operate to their full potential due to lack of staff. This alone means a huge amount of revenue and turnover goes missing at a time when it’s vital to chip away at existing bills and negate the energy and food inflation.
And finally in this intertwined pub nightmare, don’t forget that our customers are being hit by the same inflationary economics with mortgage rises on the way. If someone’s mortgage is £1,000 a month and then suddenly jumps to £1,500 or even £2,000, that’s a hell of a lot of disposable income they’re losing. The reality is that it will mean less visits to the pub next year.
WHAT IS THE KEY TO SURVIVAL FOR PUBS?
Whether you’re a small, medium or big pub business, I think the key to survival is being as fluid as possible. It’s vital that you pay attention to every facet of the business, every cost and outgoing and react to the marketplace as best you can. Basically, take your business to the gym. Make sure it is fit for purpose in the current environment.
WHAT DO YOU SUGGEST WHEN IT COMES TO FOOD?
When it comes to the food, it’s about streamlining and working efficiently. If pubs haven’t looked at reducing the size of their menus, I think they will need to come winter. It’s about being savvy and getting the most out of the ingredients you buy. If you’re open 7 days a week, you can constantly be moving things through so you can buy-in whole animal carcases, which means it’s cheaper than buying individual cuts and you can utilise everything.
Don’t over-worry about offering absolutely everything on the menu. Look at what is most popular, what has been selling and concentrate on the key dishes. If you know rib eye steaks are the most popular, don’t worry about offering three different cuts and just concentrate on them as you can purchase accordingly and get better deals.
Food costs will always be high but there are ways of being creative and trimming back in certain areas. Analyse and assess where can you make savings, where can you trim, what is unnecessary – without adversely altering the core values, offering, quality or experience.
ANY OTHER BUSINESS BOOSTING IDEAS?
Bar snacks used to be a packet of crisps or nuts, but those days are gone. The right bar snacks can be a great business booster, they’re brilliant for the upsell and it doesn’t have to be too complicated. Great homemade sausage rolls and some quality olives are ideal. They’re a gateway into people eating, they’re amazing for sharing and are a good way to get staff physically and actively upselling.
HOW SHOULD A PUB PROMOTE ITS OFFERING?
For me, social media should definitely not be the key driver and strategy for promotion. It can be good for a pub’s presence, but I think we sometimes give it too much credit for bringing in custom.
Pubs have always been central to local life, so I believe the best promotion for a pub is to ensure they tap into that community spirit. It’s about generating that positive word of mouth locally. That could be supporting a local charity, local businesses, supporting a local football team, the local schools, providing employment for the next generation of teenagers needing part-time jobs. You will find that if you employ local kids and they work one or two evenings a week and are treated well, they will tell their friends and their parents will come in. It’s a longer-term strategy than doing a promotion on Instagram giving away 2-for-1 burgers, but I believe it provides a much better and stronger foundation for a pub business.
HOW COULD THE GOVERNMENT MAKE A REAL DIFFERENCE?
The biggest thing that would help pubs and hospitality as a whole would be a reduction in VAT. A frontline reduction in VAT would do so much good and also highlight that the government is there for pubs and willing to support them. There is no point in giving backend tax breaks because it just doesn’t work. Tax breaks on profit are pointless as businesses are just not making profit.
A reduction of VAT to 10% is still higher than a lot of places in Europe, but it would mean 10% more in revenue that can be used to adapt, adjust and attack the difficulties in the industry in a real positive and forward-thinking manner.
People running hospitality businesses have a serious passion, heart and soul for the industry. It’s not like other industries where if a 10% tax reduction came in, the money is just pocketed. Hospitality businesses are constantly re-investing because the industry is constantly evolving, and it’s filled with entrepreneurs. A VAT reduction would also be a huge instant pressure release valve for small, medium and big businesses.
