Despite achieving record sales in 2022, up to a third of UK hospitality businesses are at risk of closure. Rising inflation and energy costs, labour shortages and ever-increasing customer expectations have left venues shaken, stirred and short-staffed – with many having to call time at the bar as a result.
So how can food and beverage operations in the hospitality industry remain competitive in this tough economic landscape? To find out, Square partnered with Deputy, a cloud-based workforce management and scheduling platform, to produce the Raising the Bar State of Hospitality Operations report.
Carried out in January, we surveyed 300 bar, club and restaurant owners to learn how they’re driving growth in their business. The results were fascinating, and here are just a few…
Successful owners know that brilliant, passionate employees are their lifeblood. In a bid to boost staff retention, some 97% of the hospitality business operations we surveyed were so focused on staff well-being, they used feedback forms, surveys or frequent one-to-ones as a way of keeping their team happy and engaged.
99% of bars, clubs and venues in the UK are using tech to track staffing levels, and 23% are using point-of-sale data to do it.
76% are currently using influencer marketing to promote their business, or are planning on adopting it moving forwards.
You can download the full Hospitality Operations Report below, but we’ve picked out some valuable insights you can use to raise the bar, reduce costs and boost the bottom line in your own hospitality enterprise.
Three ways to boost profitability and reduce costs in the hospitality industry
1. Get a handle on your stock
Inventory control was front-of-mind for nearly half of the businesses we surveyed. And it’s no wonder. Without strategies in place to control waste and manage stock loss, you might as well be throwing profits straight in the bin.
Overstock and waste can be a huge drain on any hospitality business, and it’s vital you have systems in place to manage them. And the most popular way for getting a handle on the problem according to the report? Data.
Having the right numbers at their fingertips was an essential part of hospitality operations management with 41% of respondents saying they use dedicated software to track stock loss and 20% stating they use integrated inventory management software.
Food inventory management can be a constant balancing act. You want enough stock to fulfil every order, but not so much that it spoils. Spreadsheets can only take you so far – you’d have to be a wizard to gain a fraction of the analysis and data that inventory management software provides at the touch of a button.
And that’s where integrated software designed for bars and clubs comes in. The right restaurant POS can help ensure your business thrives with built-in inventory management software that makes managing stock and waste a breeze. They can give you full visibility of your whole business in one place for the real-time insights that help identify efficiencies and reduce your operating costs.
2. Keep your workforce happy and engaged
Staff shortages continue to be a huge problem in the hospitality industry, with businesses having to turn away bookings as employee numbers remain low. Official figures show hospitality vacancies have risen by 72% post-Brexit, while the number of EU workers in the industry has fallen by 26%.
Businesses have had to adapt to the Covid-Brexit double whammy, training staff to cover multiple roles, increasing the number of flexible contracts or hiring staff from temping agencies.
Further research from Deputy found that 35% of hospitality staff dislike the health impact of shift work. As a result, bars and clubs with higher levels of staff retention are prioritising shift worker engagement and finding better ways to support their health and well-being.
So how can you use this insight to keep your own employees happy and engaged? One way is to draw on the support of your POS. By investing in systems designed to support the staff who are already employed, hospitality operations stand a greater chance of retaining those employees and attracting new ones in the future. For example, Square POS has a Deputy integration to make it easy to do routine tasks like staff scheduling and swapping shifts, helping you become a business people actually want to work for.
The right restaurant POS can also help you identify top-performing members of staff and reward those accordingly. Recognition-rich cultures see as much as 31% lower turnover rates than cultures that don’t prioritise employee recognition.
3. Invest in tech
Bars and clubs are continuously looking for ways to streamline their operations, reduce operating costs, uncover improvements and drive growth. Tech adoption plays an important role in this, with the survey discovering that 82% of businesses plan to change how they use tech in 2023.
Clunky, out-of-date tills and ordering systems can slow down your restaurant. Using the latest hardware is key. Square Stand, Square Terminal and Square Register can keep your business moving by quickly accepting chip and PIN, contactless and mobile payments – either on your counter or when you’re offering tableside service.
But it’s more than just new innovations in hardware that hospitality establishments are looking for. Seeking solutions that not only integrate seamlessly with each other but with other restaurant technologies too, such as OpenTable, can lead to increased bookings and valuable efficiency savings, along with more insightful and accessible data.
And while a basic restaurant POS system lets you take orders and process payments, a fully functional system offers so many more ways to streamline your operations – kitchen display systems, table management, mobile payment options, multiple location management, staff management, inventory management and automatic tipping to name but a few. Every aspect of your business can be tracked, and efficiencies identified, giving a single view for better decision-making.