How has the Recession Affected the Hospitality Industry?

Recession - “A period of general economic decline; typically defined as a decline in GDP for two or more consecutive quarters. A recession is typically accompanied by a drop in the stock market, an increase in unemployment, and a decline in the housing market” (InvestorWords.com, 2009).

The recession in Britain officially started in the second quarter of 2008, some one and a half years ago. The recession indicates a slow-down in economic activity as a result of less money being spent, and more jobs being lost due to the money not being spent to keep employees in the job, and due to the increased unemployment, less money can be spent, this causes a cycle, which can spiral downwards very quickly which drags the economy down with it. The Credit Crunch played a huge part in the recession; it caused a shortage in finance and disposable income, this along with inflation meant a loss of confidence in the financial sector.

Due to the shortage of disposable income, far less money is being spent in restaurants and bars, and this theory is backed up by a research firm named Mintel, where 2,000 consumers took part in the research, the research found that “66% said they would spend less on going out to restaurants because of the economic climate, while 59% said they are already cutting back on trips to the pub” (Thomas, D. 2009). But, although consumers are eating out less, bar and pub food is still of a relatively high demand. Research carried out by another company, named Buckingham Research, which was carried out on 600 consumers, has produced the data that within April of 2009 and April 2010, 75% of families within the UK will cut back, or stop going out to eat and drink (Kühn, K. 2009).

The hospitality industry seems to have been affected by the recession very negatively, but more research, undertaken by Barclays Local Business, has found that 64% of the 150 hotels and caterers used in this research said their business has become more efficient due to this recession, and 45% have also seen an improvement in their customer service. This may be due to more care being taken when making orders for stock, and being more careful with hours worked and numbers of staff on at any one time. Further more, 20% feel the recession hasn’t affected them at all (Thomas, D. 2009).

References

FinancialAdvice. (2009). When did the UK recession officially start to kick in? [Internet]. Available from: [Accessed: 23 November 2009].

Kühn, K. (2009). Recession prompts 75% of British families to eat at home. [Internet]. Available from: [Accessed: 23 November 2009].

Kühn, K. (2009). Restaurants suffer as slump hits Europe. [Internet]. Available from: [Accessed: 23 November 2009].

InvestorWords. (2009). Recession: Definition. [Internet]. Available from: [Accessed: 23 November 2009].

Thomas, D. (2009). Consumers avoiding pubs and restaurants as recession fears grow. [Internet]. Available from: [Accessed: 23 November 2009].

Thomas, D. (2009). Recession has made us more efficient, say small firms. [Internet]. Available from: [Accessed: 23 November 2009].

Has Heston Changed Little Chef?

In 2008 Heston Blumenthal took on the challenge of revamping the roadside restaurant brand named Little Chef, he started at a single restaurant in Popham, Hampshire. Little Chef, in 2007, was saved from administration by RCapital, a private equity group, where the chain was believed to be losing as much as £3million a year. This revamp was to be filmed during the summer of 2008 to tie in with the 50th anniversary of Little Chef, and aired on Channel 4 early in 2009, with a revisit six months later to see how the restaurants were getting on. These restaurants had been deserted by customers, the chain used to be a very widely known and used restaurant across the country.

Heston gave himself the task of improving the food, from what was a very poor standard, to something he would be happy to serve in his own restaurant, the Fat Duck in Berkshire, although the food he serves there is very scientific in the way it is made and put together on the plate, this would not be expected in a roadside restaurant for families, who would expect to pay no more than £10 for a main course. The revamped menu Heston designed was moved into a further two restaurants in York and Kettering West, the restaurant chain is now doing very well considering it went into administration only two years ago, “with profits forecast at £3m, on turnover of £77m for the 12 months to the end of December 2009”, Kühn, K. (2009). Heston also managed to get the original restaurant he improved into the Good Food Guide whish has only the best restaurants across the country in it, and along with the Good Food Guide, came many extra customers, “since Little Chef at Popham was revamped last year, the restaurant has seen a 500 per cent increase in sales immediately after the programme and is now consistently up 150 per cent year on year” Little Chef (2009).

All of these statistics show Heston Blumenthal has considerably changed Little Chef, with considerable increases in both profits and customers dining at the restaurants affected by Heston so far. All of this is in spite of the difficulties faced when dealing with the chief executive, Ian Pegler.

References

4od. (2009) 4od. [Internet]. Available from: < http://www.channel4.com/programmes/4od> [Accessed: 06/11/2009]

Afyia, A. (2009) Heston Blumenthal not consulted about Little Chef menu roll-out. [Internet]. Available from: [Accessed: 06/11/2009]

Cockcroft, L. (2008) Heston Blumenthal to transform Little Chef. [Internet]. Available from: < http://www.telegraph.co.uk/> [Accessed: 06/11/2009]

Kühn, K. (2009) Heston Blumenthal effect raises profit forecasts for Little Chef[Internet]. Available from: [Accessed: 06/11/2009]

Little Chef. (2009) Did Heston Change Little Chef? [Internet]. Available from: < http://www.littlechef.co.uk/promo/channel4> [Accessed: 06/11/2009].

Sharkey, G. (2009) First Little Chef revamped by Heston Blumenthal makes Good Food Guide. [Internet]. Available from: [Accessed: 06/11/2009]

Walton, C. (2008) Michelin-winning chef Heston Blumenthal to revamp Little Chef. [Internet]. Available from: [Accessed: 06/11/2009]