I have seen a good spectrum of hospitality in operation since ‘Super Saturday’ on July 4th, and a mixed picture emerges of the safe distancing and mitigation measures that are being taken, with some more relaxed or less strict, and others following guidelines to the letter; None of them are either right or wrong, they are using their best judgement, writes Simon Stenning.
We are seeing the same at the moment when looking at the way in which the VAT cut is being applied; there are some operators who are adamant that they are going to keep the saving in order to survive, whilst others are simply reducing all their menu prices, whether the printed menus have been amended or not. We’ve heard announcements from big chains that they are passing it on, but then some of them had increased prices post-lockdown, so are still protecting their positions.
My advice to operators that I talk to and work with is that a VAT cut is a perfect measure to support their business, but a degree of thought ought to be applied; it is designed by the Government to encourage consumers to get back out spending (and there is still a huge challenge to get consumers back to normal), and ought to be tactically used to demonstrate to customers that prices have dropped and that it is now both safe and good value to eat out again, without passing all of the cut on.
My key advice is to take a few ‘Known Value Items’, best sellers or competitive dishes, and obviously reduce their prices to reflect the VAT cut, and then apply some menu engineering to show other price cuts, even if the starting price has been artificially pushed higher.
There are ways to pass on some benefits to get customers feeling better, and ways to keep the savings and help protect businesses, the answer lies in the middle.
Simon Stenning is a strategic advisor and futurist specialising in the hospitality/ foodservice market. Visit www.simonstenning.com for details of his latest report on “The Immediate Future” or email firstname.lastname@example.org.