Managing labour costs is top challenge

By Nikkie Thatcher

- Last updated on GMT

Looking ahead: operators revealed a plethora of challenges they are anticipating
Looking ahead: operators revealed a plethora of challenges they are anticipating
UK hospitality business owners are struggling with staffing costs and customer loyalty, according to new research.

Managing labour costs was cited as the top challenge (61%) followed by cash flow (39%) and maintaining customer loyalty (34%), customer engagement company Givex has found.

Business owners were also asked what they expect to invest in this year and the majority answered hiring and training staff (56%).

Future investment

Respondents to the survey, which polled 202 adults who hold senior management positions in August 2019, also said they expected to invest in takeaway services (47%) and developing loyalty programmes and marketing during the next year (29%).

More than a quarter of those surveyed (26%) said they don’t currently track loyal customers and of those who do have a loyalty programme in place (33%), the most popular way to reward customers is with discounts (48%), followed by a free drink or meal (40%) and exclusive events (21%).

Givex managing director Jurgen Ketel said: “It’s not surprising staff costs and training are priorities, considering the looming Brexit deadline.

“A KPMG report suggests a quarter of employees in the UK’s restaurant and hospitality industries are from the EU, amounting to 3m workers."

Massive impact

He added: “Brexit could have a massive impact on labour for restaurants, so it is important they upskill the teams they already have.

“Historically, it has been challenging for restaurants to develop successful loyalty programmes. The rise of delivery app partners doesn’t help with loyalty either because customers are usually more loyal to the delivery partner rather than the restaurants they order from.

“In addition, customer data belongs to the delivery partner, which means restaurants have no way of tracking their customers or engaging with them if they stop ordering from them.

“Some have built loyalty via discount codes, but this can be a vicious circle – customers then always expect a discount when eating there. This is where PoS technology can help. If there’s a system keeping track of a customer’s orders, times they come in and what items are most popular on the menu, it’s much easier to build loyalty programmes around them.”  

Related topics: Training

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