The chief executive of Fuller's tells Chris Gamm his plans for reopening the estate of 393 pubs and hotels, why discretion is key to building customer confidence and what the government must do to ensure hospitality survives the coronavirus crisis
What impact has the coronavirus lockdown had on your business?
Last year was a transformational one for Fuller's. We completed the sale of the brewery business to Asahi, returned capital to shareholders, strengthened the balance sheet, recruited a new executive team, had a fantastic acquisition in Cotswold Inns & Hotels, a new head office, and the builders on-site in a dozen properties.
It was the start of a new phase and we wanted everything in place for the new financial year beginning in March 2020. We were ready for an exciting year.
Then, on 15 March, the prime minister advised the public not to go to pubs. We closed the estate down overnight and went from a £350m business with high expectations to one that was closed down.
The furlough scheme was revolutionary in terms of the government taking a proactive approach to companies laying off almost entire workforces. It was a situation not of our making and it was good to see the government recognise that. We furloughed nearly 5,000 members of staff and have run the business on a skeleton head office team. We've all communicated brilliantly during the period and kept everyone very involved.
We also made the decision to not only complete the planned refurbishment programme, but also bring forward more refurbishments planned for later in the year. It's almost unheard of in the sector, where most have halted all capex. We have redecorated all Bel & the Dragon and all Cotswold Inn & Hotel sites during lockdown. When we reopen, the estate will be in pristine condition.
And what impact are you planning for the next 12 months?
It's very difficult to model. We've never had times like this and it will vary enormously by site. We expect outlets in city centres to be hit harder as the lack of arts and tourism will massively affect footfall, particularly in London. We expect sites with large outside spaces, especially in staycation areas like the Cotswolds or the New Forest, to be more robust.
It's why the weekend of 4 July will be an important start. Confidence is everything for consumers, to ensure they're safe and healthy, but also confidence in going back out again. Most have not been out for 15 weeks.
Confidence is everything for consumers, to ensure they're safe and healthy, but also confidence in going back out again
You said you would only open 27 of 393 sites with two-metre social distancing in place. What are your plans at one-metre-plus distancing?
We'll be taking a careful, long-term, measured approach and we'll have 27 pubs and hotels open on 4 July. Realistically, 4 July and one-metre-plus were only confirmed with 11 days' notice, which means we can accelerate plans for the remainder of July. We will be opening a further 50 sites on 13 July and a further 50 the week after that. By the end of July, we will have 85% of the estate reopened, enabled by one-metre-plus distancing.
For the balance of the estate, it depends on what we see with sales. The sites that will remain closed are in London, in the City, the West End and transport stations. We're calling on the government to work closely with the mayor to get London back to business and work. We need to see footfall to reopen. London has been a driving force of the UK economy for the past decade and it needs a carefully co-ordinated and well-financed plan.
One of the real positives of the last 15 weeks has been the excellent dialogue between the industry and government. Industry leaders have had good access to ministers, who have recognised the role hospitality plays in society and the economy.
Can you describe what the experience will be like visiting one of your pubs and how it will have changed?
It's still got to be really enjoyable and put a smile on customers' faces. It can't feel like waiting to see the doctor or dentist. We'll be focusing more on cleaning protocols and staff training and less on new Perspex screens. We're trying to make things easier for customers, like electronic ordering and having more staff on to host seating.
We want the pub experience to be enjoyed. You don't have to go to the pub, like you do the supermarket. We won't take the enjoyment away.
We want the pub experience to be enjoyed. You don't have to go to the pub, like you do the supermarket. We won't take the enjoyment away
What operational changes have you made in readying the business for reopening?
We've removed furniture to allow for one-metre-plus social distancing; we'll have doors for going in and going out; and we will be reducing capacity by around 30% so we can comply 100% with guidelines. Most of our estate has got enormous historical interest that we don't want to alter them with temporary Perspex screens.
We worked with the government and trade organisations to put the guidelines together and engagement was very good, so there's nothing I don't fundamentally agree with. It's been put together with a good degree of common sense.
We're already seeing most customers wanting to pre-book. We will take walk-ins, and we'll use all efforts to seat everyone. Customers will be allowed to go to the bar and order, but they will have to return to their table afterwards.
Early bookings are looking really strong because capacity is limited. There's also good interest in our 1,080 bedrooms across the estate in July and across the rest of the summer.
What were the most important factors to get right?
Ensuring staff feel safe and won't be put in an environment where they feel uncomfortable. The physical and mental health of staff is important to us. Last Thursday, we brought back every single member of staff from the 27 sites reopening on 4 July to retrain them on the new protocols. The vast majority were looking forward to coming back as they recognised Fuller's will do things properly.
What measures are you putting in place to give customers and staff confidence?
We've employed extra colleagues who will be cleaning door handles and surfaces on a regular basis during trading. We don't want to intrude on customers and constantly remind them the virus exists. We don't want staff wearing T-shirts identifying them as Covid cleaners. It needs to be done subtly, delivering the highest possible standards, but not putting up PoS about it.
It needs to be done subtly, delivering the highest possible standards, but not putting up PoS about it
Staff will be wearing masks discretely, and based on feedback most don't feel the need to wear them if we're implementing the protocols properly.
Have you invested in any new technology or systems?
We were already very advanced in many aspects. We already had table reservation technology, but on Saturday we rolled out an order and pay-at-table app.
Customers will still be allocated a server as a starting point, as service is one of our USPs. However, if they say they'd rather order via the app, they can. It will be interesting to see what the take-up is, but I don't envisage many will want to use it. It's there as an extra layer of safety and security if they want it.
What changes are you expecting to consumer behaviour and do you expect the growth of delivery during lockdown to continue?
My own view on delivery is no one is making any money. Deliveroo is burning cash at an alarming rate and restaurants are going out of business. Consumers may well like the model, but it is being subsidised by shareholders at Deliveroo and restaurant companies and is unsustainable in the long run.
Fundamentally, we are a sociable race and we go to pubs to enjoy the company of friends, family and colleagues. This experience can't be replicated at home.
Delivery is fine if you come home from work at 9pm and don't want to go out, but it's no replacement for the pub experience. I'm not ignoring the threat, but I am instead investing in the pub experience.
What are the challenges over the next year?
The challenge the industry has is that by autumn and winter it will need support from government to get demand back to the level where we can maintain employment in the sector.
There are 11 million people on furlough, including three million in hospitality, and it would naive to think all these will get their jobs back. If the government gets us through to 1 April 2021, through spring and summer, with lots of sporting events and lots of pent-up demand, the industry can then get back on its own two feet.
What support are you asking for?
Our sector employs lot of young people and I'm very worried about having lengthening unemployment queues. We need to make sure demand is high and we need to keep prices down to improve the financial position. VAT has to be cut to 5% and this assistance is really important for 12 months to get us through to spring.
The other area is business rates. Anything that was already going wrong before coronavirus will go wrong in a big way after. The entire business rates system is outdated and penalises physical businesses. The government has got to have a radical reform of business rates, with a fairer system that encourages investment and job creation.
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