There’s a real possibility that when workers finally return to their city centre offices sometime in the next 12 months, they won’t go back to the five-day-a-week, office-based life. Why should they? Why would they?
Working from home balances life and work more evenly, is less stressful, cheaper, and safer than working from an office – but is it a lifestyle all workers want every day of the week? I doubt it.
Extroverts such as me, who gain their energy from being with other people, are likely to find being on their own from 9am to 6pm, five days a week, stressful, draining, boring and lonely. The kitchen can become an unhappy place when there’s no-one else in it for long periods of time. Laughing on your own to something on the radio isn’t as much fun as laughing with, or at, someone else. It’s ok having a day at home when you can wander outside to pull a few weeds in the sunshine, it’s less great when it’s dark at 4pm and the rain is horizontal.
Working in an office for three days out of five is one potential answer – and one most operators with city centre sites have become resigned to and are planning for. An office-based working life at 60% of pre-pandemic levels will have a significant impact on every element of an operator’s business. They will have to work out how to make money at 60% sales level and, if they can’t, they need to get out now.
Landlord agreements are usually the first item on the agenda and these are being negotiated quietly and effectively by operators on a three to five-year term and beyond. Turnover-based rents are being agreed because landlords also realise the post-Covid world is going to be different and it’s better to work with an operator you know and trust than agreeing a new deal with someone you don’t.
Team hours, payment and rewards are usually the next negotiable. Fewer hours, less paid time off – for example, not paying for breaks – more flexible working patterns, 20% to 30% salary cuts and cross-trained teams are all on the agenda. Head office teams will be cut to the core – no slack, no ‘nice to haves’ and no offices. Flexible freelance resources will replace the employed. Infrastructure will be light and lean. Every project will be reviewed for its potential delivery to the bottom line and cancelled if unlikely to deliver.
Some of these structural changes at site level will be driven by changes in opening times and daypart trading. Pub breakfasts could be a thing of the past. Coffee shops opening beyond 6pm may not be possible, while bars could close during unprofitable afternoon shifts.
Then it’s on to the supply chain. Simplicity and focus will be key, with menus less complex and shorter, and drinks ranges rationalised. Suppliers will be culled to obtain better terms from larger volumes on a smaller range of items. Volumes will be merged between operators who would never have thought about collaborating previously to gain better, more advantageous prices.
Kitchens will be rethought. They will be more efficient in time and space, more ergonomic. Every dish will be scrutinised to ensure it’s made as effectively as possible. Waste will have to be managed better, including food left on plates by guests (about time too).
Every overhead will be challenged – lighting, gas, water, rubbish collection. Every monthly charge from ‘bottom feeders’, as Hamish Stoddart calls them, will be scrutinised. Digital implementation will be accelerated at an unforeseen and previously unknown speed. Innovation will be seen as an imperative with no time for the “we have never done it that way” kind of philosophy.
There will be less reliance on guests coming into sites and more effort made to deliver food and drink to customers. How to deliver an offer to guests has to be on the agenda and operators will have to find innovative ways to do this without massacring their margins through aggregators.
As one operator said to me: “We are thinking the unthinkable. Nothing is off the table.” If sales fall in city centres to 60% of previous levels, we all have to think the unthinkable too to make money, stay open and keep operating.