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Owen Morgan, 44 Group: Back to Business Q&A

Published:  13 August, 2020

As the trade measures up to extraordinary times and swings into the height of summer, leading businesses and operators take stock of trading conditions in the new normal.

Owen Morgan, director of Spanish-focused 44 Group, continues our series with insights into shifting sales patterns, the road to recovery and a – gradual – return of consumer confidence.

How is the business performing and what are sales like compared with pre-lockdown?

Unfortunately none of our sites have reopened yet, so I can’t tell you. But most of our sites will be reopening by the end of August / early September. 

It’s been difficult in Wales with restrictions opening up a lot slower than England [lockdown for restaurants were officially eased on August 3], and even now there is no relaxation on the 2 metre rule.

What are the biggest changes and challenges in adjusting to the ‘new norm’?

The biggest thing we’ve been planning for for months now, is streamlined wine lists, streamlined menus, streamlined teams on shift at any one time. So that’s been a challenge, but one which we are relishing as a chance to rip up the script, menu formats, and anything that may have remained the same for too long. I hope customers will actually appreciate smaller menus and smaller wine lists. If anything, quality should improve in all aspects. 

Which government measures, if any, have had an impact on your business and have you been passing on or absorbing savings?

Everything has had a huge impact. It’s been the most trying time professionally and personally I can remember. Furlough did have a big impact, meaning we could safeguard our staff throughout. Grants were very hit and miss depending on the location, building, size etc. Along with most of the sector, I think the VAT cut on food is aimed at helping businesses get back on their feet, rather than slash prices. Though we will cut prices on certain dishes with high end ingredients, because it’s a chance to get more people trying them.

Have you seen any significant shift in type and price of wines and spirits sold and, if so, what has that been?

Because we are still shut, I can’t say. But I’m very much hoping people will spend more on a great bottle of wine for example, as I do believe people will go out less often, like we saw after 2008. But when they do, they want to go somewhere they trust and know they’re in good hands, therefore go for something a little bit more special. 

Covid-19 has ignited discussions around health, not least the government’s anti-obesity campaign which could see mandatory ‘hidden calorie’ content on alcohol labels and menus in the on-trade. In your view, what would be the impact of this?

This would be horrendous! Most good restaurants are in the business of giving people a great experience and a night out, a bit of luxury and comfort at the same time. Calorific values on the side of a menu in my opinion would ruin the experience, and is completely unnecessary. Not to mention the time and money it would cost to implement. Then what about restaurants that change menus every day?!

And what of other government-backed schemes like the Eat Out to Help Out initiative, on the health of the trade?

I don’t think it can hurt. It’s being reported in the wrong way by the media and a lot of restaurants though, as being half price, which it clearly is not. But it is £10 off your meal, which can’t be a bad thing early [in the] week. Having said that, it may be a drop in the ocean regarding the help needed. 

The end to the Brexit transition period is just around the corner on 1 January. How have you been preparing during and post-lockdown?

We’ve been looking at strengthening relationships (even more) with local producers and suppliers. We are a Spanish led group, so are in constant communication with producers and friends all over Spain also. It’s extremely worrying though, almost like a perfect storm. 

Have the past few months led to any positive change that the trade can and should adopt going forward?

I think in parts it has. I think the trade will be forced to become a lot more efficient, more nimble and quicker to adapt. Smaller offerings and teams will have to be the way forward, less stockholding tying money up, less expensive restaurant fit outs (you would think), more negotiation on rent levels and better communication. The old system was broken, so mass change is due and wanted. 

Covid-19, recession, Brexit, climate crisis – we’re living though extraordinary times – what will the biggest challenges for the drinks trade going ahead?

The biggest challenge will be getting through the next two years I think. Our close relationships and loyalty with certain producers and suppliers has really come home to roost, as they have all been fantastic in supporting us through this. The same goes for the staff. Our team have been amazing. We do hope that the way you communicate and treat people, makes a big difference. Going forward we will continue to have close relationships, and keep pushing whilst being leaner and keener, to improve by levels. You can only look after yourself and believe in what you do.