Plan for profit

Experts provide ideas and advice on how to improve a bar’s business, from service and cost controls to technology and marketing

Good service is vital to a successful business. More than three-quarters of consumers have left a bar, pub or restaurant earlier than planned because of poor service, according to a new report from customer research specialist Market Force Europe. The most common reasons for consumers feeling this way was not poor food or drink quality but slow service and lack of attention – both addressable by focusing on training and employee motivation.“This should be a real wake-up call to the industry,” says Tim Ogle, chief executive of Market Force Europe, formerly Retail Eyes.

Tim believes that gaining feedback from customers is the best way for a bar operator to understand what they are looking for, using methods such as mystery visits and customer satisfaction surveys. “It’s often very small things that do not take time and effort to change that can make a huge difference, such as not enough bar staff or the glasses are not very clean,” he explains.“Once you have the feedback, the next and most important step is to react to it.There is no point investing in this information if you’re not going to use it to have a positive impact on the business. Don’t forget to communicate the results to your staff too – after all, they are the people who will have to action the changes so it’s important they understand why they’re making them.”

Many of the initiatives to improve service need not be expensive,Tim adds – a message that will resonate with operators who have seen the cost of running a bar or pub rise over the past few years. According to the latest annual Benchmarking Report from the Association of Licensed Multiple Retailers (ALMR), operating costs as a percentage of turnover have climbed steadily over the five years during which the ALMR has carried out the annual survey, peaking at 51 per cent at the height of the recession. According to the 2011 report, this percentage stood at 45.9 per cent, suggesting that the licensed trade is back on track with better cost control.

One of the biggest concerns for bar owners is the rising cost of utilities, with the ALMR’s Benchmarking Report saying this was, on average, equal to 3.6 per cent of turnover. Lynx Purchasing specialises in helping hospitality operators to save money by getting the best deals on utilities and other products and services.With oil prices still at relatively low levels, but increasing as tensions in the Middle East and Africa continue, Lynx believes that businesses should be looking at signing up to multi-year utility contracts to guard against volatility in the market.

The warning comes in the newly-published Lynx Purchasing Market Forecast, an overview of market and pricing trends for hospitality operators.“Utility prices are driven by events, and predicting how they will behave is never simple,” says managing director John Pinder.“With utility prices currently as low as they’ve been for a couple of years, but expected to rise, we believe it is the time for operators to look at longer-term, two- to three-year utility deals.The savings on existing deals can run into thousands, even for a single site, and increase significantly for multiple operators.”

Expanding Mexican restaurant and bar chain Benito’s Hat, which has opened its fourth London site at the high-profile Kings Cross redevelopment, has agreed a new energy supply contract negotiated by Lynx. The restaurants’ founder Ben Fordham said: “Finding the best energy deals is time-consuming, and a huge challenge for a business. Lynx provides us with the certainty we are getting a good deal without needing to trawl through all the suppliers out there.”

Lynx has also worked with bar group Snug Bars which expanded to six sites at the end of last year with openings in High Wycombe in Buckinghamshire and Godalming in Surrey. It helped the management team with buying supplies for the bars, from serviettes, table sauces and food ingredients to one-off purchases such as outside tables, umbrellas and decking at one of its sites.“By analysing our spend by outlet and across the board, Lynx was able to help us consolidate our purchasing and identify where we could save money,” explains Snug Bars managing director Giles Fry.“It helps me protect our margin, which is more important than ever in these challenging trading times. It also saves me personally a lot of time and hassle, so I can focus on growing the business and bringing a great Snug Bars experience to even more people.”

With Euro 2012, the Queen’s Diamond Jubilee and the Olympics ahead this year, now is the time to check whether investment is needed in epos systems, warns David Broom, chief executive of Retail Fix which provides technology advice to operators.“No succession of events that will impact on volumes of trade and weight of transactions has been seen before in this country,” he explains.“Businesses have been planning their promotions, tackling the logistics and ensuring supply of staff, but many operators are overlooking the demands that will be made on their outlet IT systems and central infrastructure that could mean the difference between operating a winning business or heading straight into a technical meltdown.The big companies have IT teams and support, but it’s the smaller independents that are more exposed.”

Retail Fix has teamed up with IT consultancy Centrality to offer “IT health checks” to businesses to help them identify if their systems can cope with increased demand over the summer. David points out that many visitors from overseas will not have credit and debit cards enabled with “chip and pin” so bars need to be ready to have manual systems in place to deal with this, particularly at busy times. He also points out that many of the outlets he visits are missing out on business benefits by not making the most of the full capabilities of their epos systems.“Our smaller clients are probably using only 30 per cent of what their tills are capable of.”

Having a till system fail at a busy time can be a nightmare for bars, leading to the slower service that consumers particularly hate. J2 Retail Systems has addressed this by building hardware-performance monitoring into its PC-based touchscreen tills. Using a traffic light system, it highlights if a till is about to malfunction. Without user intervention, this information is communicated electronically to the J2 portal, where specialist reporting software fires out messages, despatches technical patches or initiates jobs with the client’s support and maintenance provider.“We see the failure before the client does, and can take remedial steps before a till stops working,” says J2’s managing director Moray Boyd.

Thanks to the new software, J2 has also been able to move from fixed-fee to incident-based maintenance, helping licensees to minimise the total cost of owning and running epos hardware.“Our goal is to keep clients up and running with no impact on point-of-sale transactions, so causing the least inconvenience at the least cost,” Moray adds. “That has a real ‘bottom line’ value in business terms, as does moving to incident-based maintenance.”

Tim at Market Force Europe says that, while summer is only just round the corner, it is not too late to make sure a business is ready. “This summer, millions of people will leave their homes to soak up the sporting atmosphere.These people will all be searching for places to eat, drink and be merry.What a fantastic chance to show customers the best your business can offer – not only with the food and drinks served, but also by giving customers a memorable experience from the service they receive.

Bars are hoping the summer events will help to increase footfall as customers flock to watch and celebrate the occasions and, because of this, it’s more important than ever for owners to be aware of the perfect opportunity to build on relationships with existing customers and retain new ones.”

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