Flaming June by Ann Elliott
Friday Opinion – Propel Newsletter – 15th July 2016
We have just had our best ever June as an agency in terms of sales and profit. In fact, we have just had our best month ever. I could put that down to all sorts of reasons but the truth of it is, I just don’t know why apart from the obvious – more happy clients spending more money with us. And I am not the only person feeling that way.
In the last week alone I have had lots of operators asking me how June was in the market place. Was it awful or was it okay? Generally, I have to say, June seems to have been brilliant with many operators in double digit like-for-like growth. “Thank goodness for that,” they say. “I thought it was just me. We had a great month but I just don’t know why.” Over a few glasses of wine, we have mulled over the reasons.
It’s not been about football. Many of those with growth, haven’t had TVs or shown the football at all. It’s not been the weather either – year-on-year, it’s been no better (and perhaps even worse) than last year. It doesn’t seem to be due to more effective marketing although a number have significantly up-weighted their digital activity this year. It’s not due to a poor performing competition. Indeed competition has become more intense, more specialist, more customer focussed and more, not less, worrying.
This June growth seems to be slightly more prevalent in the smaller niche operators, but a number of major chains have experienced it too. This is not a story about David beating Goliath. Small, medium and large operators have all talked to me about it. North and south. Pubs and restaurants.
Some think it’s down to Brexit. Uncertainty before the vote and even more uncertainty after it though, would surely normally dent customer confidence and reduce their visits to restaurants and pubs. Customers, of course, in times like this would be saving not spending money.
Customers though are not behaving like this. Covers are up. Spend is up. These growth operators wonder if it’s because more people are holidaying in the UK rather than abroad and if more Europeans are now coming over to the UK due to the relative value of the pound to the euro. This seems an incredibly quick reaction, though, to recent political events. These operators feel a surprising sense of optimism particularly in London. It feels counter-intuitive with all the recent political “goings on” but their optimism is real.
The other key reason for growth seems to be takeaway and delivery. One casual dining chain chief executive told me that they thought they could attribute at least 50% of their double digit like-for-like growth to the massive growth in their takeaway/delivered business. And it’s not all about Deliveroo (who seem to be annoying and irritating operators they work with in equal measure due to arrogance and complacency).
One major operator told me that they were using every single delivery route to market (they all cost the same anyway) that they could and that UberEats was outperforming Deliveroo by five to one. He couldn’t wait for Amazon to start their delivery service so he that he had multiple routes to market for his delivered product.
The great thing, too, was that this growth has not stopped at the end of June. It is happening in July. These last two weeks have also seen amazing sales growth despite Brexit, the weather, the football, Boris Johnson, the labour leadership challenge and the launch of Pokémon Go (or perhaps customers are looking for Pokéstops in restaurants and pubs).
Long may this growth continue – I love talking to happy operators.