Brexit lies just over a year away and even with an extended transition period, there are going to be less and less people seeking to move to the UK. We have reaped the rewards of some great talent from Central Europe over the last fifteen years. This has been an issue well debated by many and the following article does not seek to go over old ground – more discuss a couple of ideas and concepts that are being developed and are coming to the fore in planning.
- There is a school of thought developing that presents the vision of the market – in 3-5 years time – being served by a series of well developed, large scale CPU operations strategically positioned across the UK and with a number located around the M25. The argument is that the cost of doing business in a fixed site operation is set to rise with Brexit with a potential rise on food prices ( a point that is debated) and rise in labour which is estimated to be in the region of 15-20% which is a big number to take into the P&L. It is therefore more logical to reduce labour on site and to transport food into a site. The argument is that many companies can cut up to around £200k from their labour bill on site through such a methodology and even with the extra logistics costs and management, there are clear savings that can be generated.
- Of course the argument is that this will reduce fresh food being served in many sites but there are great examples in play of fresh food being delivered in each day – so it is more about menu design and food styles and of course, many companies will be able to reclaim kitchen space (a cost and turn in to a revenue stream) which should allow for a more than balanced model.
- At the same time there are some excellent cook-chill products being developed today that can easily compete in high volume environments and with the sophisticated product development that takes place today, these products can match many retail food products/high volume foods that can be in food in stadia, visitor attractions and in conference venues. This market has been working hard to develop food produce that can help reduce labour costs, the need for skilled labour plus have food that is good nutritionally and able to easily replace the existing processes.
It is interesting that some food service companies see the solutions above as being a potential threat but the truth is far from it – they are potential solutions for some major problems that coming down the line and it is just logical to be considering options. For example:
- There are many companies seeking to reclaim kitchen space for office space and ask still more of the food service companies.
- State education is under pressure on budgets. It makes sense to consider a change to the process as long as the food delivered in is nutritional healthy and engaging.
- The cost of labour is going to increase for commercial models that already feeling pressurised.
- It is going to be bad enough for operations in City centres but how is it going to work for operations – especially cultural, heritage and visitor attractions not based in strong employment centres?
- How about for stadia which are trying to entice greater audiences with greater F&B offers but with labour costs?
- How about Government sites which require strong employment vetting, etc?
Wherever one looks there are greater and greater issues beginning to spring forth. Questions are being asked and solutions will soon be needed.
We have long been arguing that the delivered in model is set to grow against this back drop but needs to look not just at the cost implications but to improve the engagement and service levels on site – this is where some extra investment is made as the word service in food service needs to take a lead and a whole new level of service be provided as service can create a strong relationship with customers.
Models are going to change and maybe now is the time to really develop plans for how this may will impact?