Retailing skills will be vital for hospitality’s future.

Italian meal kit from Cafe Murano

For £175, Angela Hartnett’s Cafe Murano will deliver a white truffle menu box to your home while Davies and Brook at Claridge’s is up for delivering a meal kit of roast chicken for four people at a cost of £145. Other high-end places such as Le Gavroche, Hide and Smith & Wollensky are offering similar upmarket propositions that would have been highly unlikely before covid-19 when they predominantly concentrated on their dining rooms.

It marks a major shift in the way restaurants have to think very differently about their business models and revenue streams. We are seeing a plethora of initiatives from restaurant operators who are valiantly fighting to keep the lights on and their teams employed.

But even in a post-covid-19 environment, it is questionable whether they will be able to return to the old ways of solely producing food for consumers on their premises and possibly having a delivery element if they can be bothered with the added complexity (and gentlemen in motorbike helmets) it brings. 

What we are seeing is hospitality businesses become increasingly similar to retail operations. As well as developing meal boxes (for cooking at home), many have opened up temporary store fronts in their restaurant space and added online shop fronts for taking orders for home delivery and click and collect. Some such as Top Cuvee in north London have opened stand-alone shops dedicated to their retail element that operate alongside their restaurants. 

Others such as Pret A Manger and Leon have moved into selling their branded products through major grocery retailers, while Greggs has begun opening cafes within supermarket outlets, having struck a deal with Asda. This will be very familiar territory for Greggs chief executive Roger Whiteside because he previously held senior executive roles at Ocado, Marks & Spencer and Thresher before moving into the foodservice sector.

He is certainly not the only former retailer to make the move. One of the recent crossovers is Andy Hornby, chief executive at The Restaurant Group, who was a senior executive at Asda and Boots. He joined TRG chairman Debbie Hewitt, who also has many years of retail experience, and they have created a strong top team that is embracing delivery at Wagamama and click and collect at Frankie & Benny’s restaurants on retail parks. 

Hornby joins Richard Hodgson, chief executive of Yo!, in the sector having both worked together at Asda before Hodgson moved on to Waitrose and then joined Pizza Express. His retail experience is serving him well as he pushes ever more collaboration at Yo! that involves supplying Yo! To Go products in Co-op stores and pre-packaged sushi lines into Sainsbury’s and David Lloyd Leisure Centres. It is also running kiosks in Tesco and Asda as well as trialling an Indian street food concept with the latter.

Speaking recently at the Propel Multi Club conference, Hodgson stated: “Our objective is to get our products to customers in a way that serves their needs. Not many people can succeed on their own. It starts with the need for collaboration. You can only survive and succeed if you work together. We’ve looked at who to collaborate with – universities, hospitals, airlines, airports and supermarkets.” 

The newest major name to join the sector, with massive retail experience and a capacity to collaborate at the highest level, is Allan Leighton. Coincidentally, he worked with both Hornby and Hodgson when he was chief executive at Asda. More recently, he was chairman of The Co-operative Group and presently sits on the board of BSkyB – among many other things.

He has joined PizzaExpress as chairman alongside new chief executive David Campbell and will bring a wealth of retail experience to a business that now has the foundations in place to take a new path following its recent recapitalisation and ability to access funds for new initiatives. 

Since these former retailers’ skills will be massively valuable in the new world order of foodservice, expect to see many more senior executives tempted away from retail and into a sector that is now undergoing dramatic change and where they can bring their knowledge to bear and create new multi-faceted business models.

Glynn Davis, editor of Retail Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Retail Insider would like to thank Propel for allowing the reproduction of this column.