PESTEL Report: The Hayloft Restaurant

Contents:

Page 1: Introduction Political Analysis

Page 2: Political Analysis Economical Analysis

Page 3: Economical Analysis Social Analysis

Page 4: Social Analysis Technological Analysis

Page 5: Technological Analysis Environmental Analysis

Page 6: Environmental Analysis Legislative Analysis

Page 7: Legislative Analysis Conclusion

Page 8: Conclusion References

Page 9: References

Page 10: References Appendices

Introduction
This investigation identifies PESTLE factors, combined with entrepreneurial and trend setting initiatives that the Hayloft Restaurant, a small independent business owned by the Dell’anno family in the Caradon district of Cornwall has developed. It also identifies any other organisations and companies who have adopted the practices, or from whom the Hayloft has developed from.

Political

1. Tariffs 2. Smoking Ban 3. Media 4. Bye Law 5. BBC Spotlight

Minor Impacts * Failure to display a beverage price tariff behind a bar is illegal as there is no guarantee of fair conduct. Due to government intervention, unlikely to change, this legislation impacts the industry as a whole and the benefit allows business owners to compare and compete.

Positive Impacts * When the Hayloft exchanged to current hands in March 2005, the restaurant constricted smoking to only the bar area, but received customer complaints of cigarette fumes around the tables. By 1st July 2007 (Smoke free England 2012) the national smoking ban had affected the entire industry. It is now customary that establishments are relieved of smoking debris, the Haylofts has replaced curtains and carpets to dispose of lingering smells.

* The global social networking trend is increasingly impacting reputations of businesses, which is potentially detrimental. As many independent companies such as ‘Webb’s Hotel’ and chains such as ‘Chiquito’ are taking advantage of Facebook, the Haylofts website (Hayloft Restaurant 2012) has created links to its profile and Trip-Advisor, which promotes a 92% recommendation rate (Trip Advisor 2012). The internet is a quick source to monitor popularity and as regular customers, the Cornish Times will offer remaining dimensions at reduced rates to the Hayloft to boost general custom.

Negative Impacts. * Roadside advertising is essential for outlets such as service station diners, but has many terms to comply with. The behaviour or drivers, and possible confusion with any traffic sign or signal (Communities and Local Government, 2007) must be considered for safety and distraction purposes. In a conversation on 18th February 2012, manager C. Border explained that a 2011 Bye Law stated certain roadside advertising must sit at specific angles, specific distance from the next eating establishment and displayed upon private property, unless permitted by Cornwall County Council. Rivalry with ‘Adrenaline Quarry’ for roadside promotion resulted in the rejection of the Hayloft’s two dual carriageway signs, which has resulted in reduced directions and visibility to the restaurant, and potential decline in trade.

* On BBC Spotlight, date, Lynda Dell'anno broadcasted an issue concerning business rates and the Hayloft. With numerous enquiries and the impression that it was closing, public misunderstanding caused an immediate decrease in custom. The Hayloft’s website published a disclaimer ensuring business as usual which should return trade to its usual rate. To continue developing, other Cornish organisations have learnt not to involve the media and public with their own business disputes.

Economical

1. Loyalty Cards 2. By One Get One Free 3. Business and Interest Rates 4. Inflation Rates 5. Unemployment

Minor Impacts * Due to the economic recession, the Hayloft has adopted trends set by organisations such as Nandos or Costa Coffee and launched a loyalty card scheme, with a greater reward for each return. As a further incentive for repeat custom it had a positive, steady impact. Although the scheme is not currently running in the Hayloft, the trend is important to re-consider using during future lapses in order to remain busy.

Positive Impacts * Influenced by supermarkets, the ‘Buy one get one free’ concept has been adopted by many mass consumer hospitality outlets. Similarly, the Hayloft created a ‘2 for £10’ lunchtime menu in 2010 as the competing Liskeard Tavern 3.2 miles away created their ‘2 for £11’ deal. Although the fine dining ambience has devolved into a pub atmosphere preceding 6pm, the restaurant has taken initiative and traded its 11p napkins for cheaper and decreased portion sizes to sustain profits. Executing this promotion requires extra labour and produces less profit, but the Hayloft has attracted a different clientele and seen a 40% increase in the summer of 2011, a positive target to exceed in future summers.

Negative Impacts * Business rates charge a certain amount of interest per month on income and cashing. Whether earning or not, the Hayloft and similar local organisations will be charged for cheques debited and credited and converting cash for the restaurant. As a small business it is more cost effective for the restaurant to deal mostly in cash to reduce extra charges.

* The governments increasing inflation rates implement higher expenses to run a business, therefore cutbacks have become necessary. Less electricity usage, fewer lamps lit and reduced heating are minor cutbacks, but it is also prudent to reduce staff hours and work harder. This could create anger amongst staff as there is no benefit for them, some organisations such as Café Rouge and Chiquito have introduced an incentive payment scheme, in order to motivate staff if savings are made (Mullins 2007). Such cutbacks will impact the industry unanimously and, in theory, for the short-term as less spending and competitive pricing should bring inflation down.

* Due to mounting unemployment the industry inundated with job applications. With a greater selection of skilled staff to employ, current employees become more loyal and reliable. Hence, need for staff training declines and teamwork prospers. Accelerating unemployment in 2011, however, is concerning for a critical drop in custom. See unemployment graph.

Social

1. Attitudes to Work and Leisure 2. Emphasis on Safety 3. Health Consciousness 4. Levels of Education 5. Recession

Positive Impacts * Many restaurants such as Café Rouge and Pizza Hut divide sections for their servers to operate, creating competition amongst staff. The Hayloft employs a positive yet different attitude to work and leisure as the owners share a complementary drink with employees each evening. Their bond is an advantage to running the restaurant using teamwork, and amplifies the Hayloft’s reputation for charm. Negative Impacts * Large chain employers such as ‘The Restaurant Group’ and ‘Tragus’ evaluate staff awareness of health and safety using computer tests and contracts to protect employees from harm, and from pressing charges if accidents occur. The Hayloft’s procedures are far less controlled, front of house staff especially are not educated on food borne illnesses, preventions and danger zones etc. As laws continuously evolve, protection from prosecution severely important to organisations.

* The influence of the media and public figures such as Jamie Oliver has transformed society’s health consciousness. Following trends from America, many establishments including McDonalds have calorie counts on their menus and offer ‘light bite’ options. This is a trend that the Hayloft has not adopted, although offering salads options, the majority of dishes contain high salt and olive oil content that are likely to decrease in popularity.

* The Hayloft has a high turnover of staff as many part-time employees leave school and move to universities. Due to the Government’s rise in tuition fees, university applications from UK students alone are down by 15.1% (Kershaw 2011) therefore the rate of staff turnover is likely to decrease commencing September 2012. The restaurant provides opportunities to undertake an apprenticeship or gain a BTEC qualification, which ensures stability, and consistent high quality chefs.

* Recession has incurred lifestyle changes and increasing numbers are choosing to eat in, which has had a global impact on hospitality. Having transformed itself to a more upper market establishment by creating a higher quality menu and standard of service, fewer customers can meet the price demands. Potentially reducing prices and profit in order to compete with other establishments is a threat to the Hayloft. However, the recession has impacted the Cornish hospitality industry positively during summer, as internal holidays have heightened tourism. The Hayloft has created a recommendation deal with ‘Adrenaline Quarry’, 200 metres away, who list the Hayloft as top restaurant under their favourites (Adrenaline Quarry 2012). As it lacks a quality dining area, the Hayloft takes advantage of the Quarry’s tourists during the summer.

Technological

1. Wi-Fi 2. Outside Catering Facilities 3. Electronic Security 4. Lack of Security Cameras 5. Micros system

Positive Impacts * As a natural progression in technology, most hospitality establishments have upgraded to wireless payment machines for ease of use and to enhance customer care. The Hayloft followed this trend in 2010 but the majority of waiting staff aren’t trained to use the machine and, due to thick walls the foundations of the building restrict signal and become impractical, customers are still asked to pay at the bar. Wi-Fi access provides entertainment to lone diners, individuals away on business, and enhances the practicalities for room function hire. Regardless of traditional table etiquette, Wi-Fi is now readily available in many hospitality outlets including the Hayloft and its main competitor, the Eliot House Hotel.

* The outside catering trend allows organisations to “go to events to capture business from people who’d be willing to pay that little bit more to get better quality” (Lorraine Heller 2010).The Hayloft has invested in a 12ft gazebo, pizza, panini and pasta stall, tigelle maker, and chocolate fountain (Hayloft Restaurant 2012) which can all be transported, and are advertised on the website. With little competition in the area, the Hayloft have catered for private parties, weddings, regattas and the Port Eliot festivals to build a name for themselves.

Negative Impacts * Throughout service the Hayloft’s back entrance is left unlocked and slightly ajar for the smokers and, adjacent to the door, the staff room and wine cellar are accessible to thieves. The restaurant has suffered a minor case of internal wine theft but unlike certain restaurants, such as the restaurants in a high capacity building such as St David’s II, has not developed to electronic lock security to deny public entry.

* The absence of CCTV cameras is another setback to the Hayloft’s security. Video evidence could provide owners with legal proof required to prosecute thefts. On one hand investment in security cameras provide protection to businesses and are used in complexes such as the ‘Red Dragon Centre’ but on the contrary it could be detrimental to the environment and cost-ineffective in a rural area such as Cornwall, where crime rates are low.

* Owners of large companies such as ‘The Restaurant Group’ and ‘Tragus’ use Micros systems to compare and contrast financial takings amongst branches and count covers per location. These capabilities are unnecessary for an independent business, however Micros can ‘meet the needs of every type and size of restaurant’ (Micros 2012), including single restaurants. Installing one in the Hayloft could monitor stock control and wastage with precision, identify each staff members’ average sale per cover and keep log exact times that orders are processed. Subsequently this could allow for time complaints to be monitored precisely, re-enforce up-selling techniques and reduce the amount of wastage to the business.

Environmental

1. Linen 2. Recycling 3. Fair Trade and Local Sourcing 4. Environmental Impact 5. Energy Consumption 6. Weather/ Climate Change 7. Building

Positive Impacts * All of the chef whites, tea towels and cloths are washed and ironed on premises, which assures production but is time consuming, expensive and has an adverse effect on the environment. Reducing just the ironing of tea-towels would be a step to energy conservation. In 2010 the Hayloft bought in 24 new wooden tables. As a result, they were able to dispose of table cloths; in a conversation on 18th February 2012 Caroline Border confirmed that this reduced an average weekly linen bill of £100-£130 to ‘Buckleigh Linen Services’ by 100%. Although Buckleigh has been recognised as one of the most energy efficient laundries in the country (Buckleigh (2012), eliminating the use of linen has helped the environment and proven a successful money saving scheme.

* By law a business without commercial waste collection can be fined an unlimited amount (Cornwall Council 2012). Consequently, the hospitality industry as a whole has become accustomed to recycling. Cornwall County Council has not implemented a food recycling scheme yet, from the 1st April 2012 – 31st March 2020 a new recycling collection contract will commence still excluding food waste (Cornwall Council 2012). With large amounts of food waste many Cornish hospitality establishments, including the Hayloft, are less developed than organisations in counties that use the scheme.

* Sourcing local produce represents quality, fresh food, minimal handling, and community care. Social factors such Ethnic and religious diversities can impact hospitality practises as certain food types and etiquettes are offensive. As Cornwall has minimal cultural diversity the Hayloft has no need restrict its menu or source special produce such as halal meats. Unlike its three main competitors, the Eliot House, Liskeard Tavern and Webb’s Hotel, the Hayloft is actively promoting local trade and boasts about its use of the “best seasonal and local produce whenever possible” (Hayloft Restaurant 2012) on its menu and website. Relationships are built with regular suppliers and independent farmers offering reliability, special offers and return custom.

Negative Impacts * The accommodation sector of hospitality in particular is rapidly developing its environmentally friendly practices. The Hayloft and its employees take responsibility to conserve energy by lighting fewer lamps and reducing tea-lights but as technology develops, light censors and dual flush toilets, solar panels and water collection tanks are now transforming saving of energy consumption. The modern next door building, visible from the Hayloft car park has both solar panels and water collection facilities. As numerous eco-buildings emerge, the contrasting Hayloft Restaurant is likely to look outdated in a decade unless it modernises in such aspects.

* The rising conditions of global warming and climate change can have a detrimental impact on the Hayloft during severe weather. The sloped car park is prone to thick layers of ice, risking the safety of people and the mobility of cars. The restaurants rural location is impractical for walkers, and during these conditions, accessibility of the restaurant is unsafe and less practical. Similarly, the Liskeard Tavern and Eliot House Hotel both have sloped parking space, but their town locations are a critical advantage, within walking distance from residential areas. Thus far, the Hayloft has not found a practical solution to this problem inflicted by climate change.

* The Hayloft’s beautifully presented building is an asset, inviting local and visiting folk. Nevertheless the building also poses a disadvantage, as a converted farmyard barn the restaurant is impractical for disabled access. Dissimilar to modern structures with ramps and lifts, the Hayloft cannot provide the ease of access that single floor plans can. As a threat to the Hayloft, the Eliot House Hotel undertook an extensive refurbishment programme in 2011 (Eliot House Hotel 2012), its function rooms are accessible upon entrance, and are able to cater for those whom the Hayloft cannot.

Legislative

1. Employment Law 2. Restaurant License 3. Regulated Entertainment

Positive Impacts * Employment laws cannot allow young persons to work past midnight. This could be a disadvantage for city hotspots, but fortunately Cornwall has little nightlife and employees have normally clocked out by 11.30pm. These laws impact the entire industry, but the Hayloft and its local competitors have used this initiative as an advantage as operating hours are not compromised and they pay a smaller minimum wage. The national minimum wage for 16 – 17 workers is £3.68 and for over 21’s is £6.08 (Direct Gov 2012), it is beneficial to employ a young worker as a saving of £2.40 can be made per hour. The proportion of young workers has previously remained steady because moving on to higher education is common, however the Government rise in tuition fees may alter this trend as young employees chose to stay with the business.

Negative Impacts * The Hayloft holds a license with terms that alcoholic beverages can only be served with a meal; this has become a disadvantage as tourists assume the building is a pub. Operating under a different license like the Liskeard Tavern could potentially create a new clientele, boost alcohol sales and increase profits. However, a full pub licence requires a business to stay open to a certain hour by law, normally 11pm. This could be a liability to quiet evenings as operating costs might supersede income. The further risk of mixing intoxicated rowdy groups with a majority of young female staff or an elderly couple enjoying an anniversary meal could lower the Hayloft’s profile.

* Socially, the Hayloft has built upon its reputation by sponsoring local football teams, displaying charity boxes and hosting charity events on the premises in aid of Heartswell. The Hayloft has hired singing entertainment to complement special events such as New Years Eve and private parties. These evenings have been popular for the restaurant but, although individual premises must not have Temporary Event Notices more than fifteen days per year (Nigel Musgrove 2006), Cornwall County Council on average only provides 4 Temporary Event Notices to the Hayloft per year.(Caroline Border 2012) As a rural area the Council is reluctant to license the restaurant past 1am as the noise levels are uncommonly high and, more importantly, situated on the dual carriageway, the risk of drink driving is multiplied. The town central Eliot House Hotel, on the other hand, is significantly less of a danger to the public and has advertised five entertainment events from the 25th February to 30th March (Eliot House Hotel 2012). The laws are unlikely to change in a more lenient fashion to the Hayloft in the future, allowing the Eliot House Hotel to develop the entertainment trend for its advantage.

Conclusion
PESTEL influences impact organisations in both positive and negative manners. Possibly the largest impact on hospitality thus far has been the smoking ban. Despite the following closure of ? pubs, the legislation will remain positive to the restaurant and dining sectors.
On the other hand the recession’s impact has been negative. For its remainder, trade is likely to remain more seasonal, especially within Cornwall. It is also anticipated to decrease numbers of students, who can’t afford inflated tuition fees. As job competition is currently high, unemployment rates will increase further.
Increasing in importance, aspects such as the emergence of social networking has forced organisations to take care and precaution in operating much more seriously. Factors have also decreased in importance, such as the 2011 Bye Law. The global capabilities of smart-phones and satnavs place less dependence on roadside advertising restricting roadside advertising.
Environmental impacts, particularly climate change, fair trade, energy consumption and recycling will impacts on the industry in the long term as the planets welfare is increasingly threatened.
On the contrary Micros systems and upgrades will impact hospitality in the short term, due to ongoing advancing technology; these systems could be replaced or outdated within a decade.
Entrepreneurial initiatives such as hiring entertainment and designing buildings structures entirely practical for its intended use can draw in new or larger markets to benefit and develop businesses.
Events management has influenced the entire structure of hospitality operations. Growing in popularity, trend setting initiatives such as developing a market for outside catering has given smaller businesses the opportunity to develop their capabilities and adapt to the growing market.
New legislation and government intervention such as licensing, employment laws, and growing economic rates give businesses no choice but to develop in a specific direction. Consequently, it is important to overlook assumptions and analyse the world surrounding individual organisations to develop a strategy for advancement. The Hayloft Restaurant has adopted initiatives set by others such as loyalty cards, and special promotions to use for its own benefit. In contrast to its main competitors, the Hayloft has advanced their initiatives to sourcing local produce, operating staff to their strengths, and establishing a reputation for outside catering in order to sustain itself as a high quality organisation in a future that continues to challenge it.

Word Count: 3,290

References

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Hayloft Restaurant [online] (cited from 22 February 2012) available from <URL;http://www.hayloftrestaurant.co.uk/>

Trip Advisor ‘The Hayloft’ [online] (cited from 22 February 2012) available from <URL http://www.tripadvisor.co.uk/Restaurant_Review-g528857-d787056-Reviews-The_Hayloft-Menheniot_Cornwall_England.html>

Department for Communities and Local Government (June 2007) ‘Outdoor advertisements and signs: a guide for advertisers’ Page 28 [online] (cited 22 February 2012) Available from <URL: http://www.communities.gov.uk/documents/planningandbuilding/pdf/326679.pdf>

Personal phone call to Caroline Border (18th February 2012, 12:39pm)

Mullins, L.J. (2007) Management and Organisational Behaviour (8th Ed) Pearson, Edinburgh.

Cornwall’s economy at a glance (December 2011) Understanding unemployment [online] (cited 23 February 2012) available from <URL: https://docs.google.com/viewer?a=v&q=cache:ufQsIGRT8esJ:www.cornwall.gov.uk/idoc.ashx%3Fdocid%3D4fb56226-a737-47a5-a295-a38fd01ecb3d%26version%3D-1+cornwall+economic+data+profile&hl=en&gl=uk&pid=bl&srcid=ADGEESjIoPDW2RrsLCW0jxlKyl2b_bFzoGgYlUueA4-nfM5UIsaoFBMD-mfitWHNTDPhqxrCmXapcK9-I7l-Jh70t-GfaSPlzQ7-08XhcjgewYeelQpdAaGWdWdkQXLgevzUZQWF4orQ&sig=AHIEtbTaFsA_8f6QD_TyhDrSDGm7Me1g-Q>

Kershaw, A (29 November 2011) Western Daily Press: Student leaders voice fears as university numbers drop [online] (cited on 23 February 2012) available from <URL: http://infoweb.newsbank.com.ezproxy.uwic.ac.uk/iw-search/we/InfoWeb?p_product=WLSNB&p_theme=aggregated5&p_action=doc&p_docid=13B575DE8F332CA0&p_docnum=1&p_queryname=4>

Adrenaline Quarry (2012) ‘Local Information; Our favourites’ [online] (cited 23 February 2012) available from <URL: http://www.adrenalinquarry.co.uk/local-information-cornwall/>

Lorraine Heller (9 November 2010) ‘US trends shaping the restaurant market’ [online] (cited on 23 February 2012) available from <URL: http://www.bighospitality.co.uk/In-the-Spotlight/Calorie-labelling/US-trends-shaping-the-restaurant-market>

Hayloft Restaurant (2012) ‘The Hayloft Restaurant: outside catering’ [online] (Cited on 23 February 2012) available from <URL:http://www.hayloftrestaurant.co.uk/outside-catering-cornwall/>

Micros (2012) ‘Restaurants and Foodservice’ [online] (Cited on 23 February 2012) available from <URL: http://www.micros.com/Solutions/RestaurantsAndFoodService/>

Buckleigh (2012) ‘All Ways Green’ [online] (Cited on 23 February 2012) available from <URL: http://www.buckleigh.co.uk/allwaysgreen.asp>

Cornwall Council (22 February 2012) ‘Business Waste and Recycling’ [online] (Cited 23 February 2012) available from <URL: http://www.cornwall.gov.uk/default.aspx?page=2929>

Cornwall Council (15 February 2012) ‘New refuse and recycling collection service’ [online] (Cited 23 February 2012) available from <URL: http://www.cornwall.gov.uk/default.aspx?page=29517>

Hayloft Restaurant (2012) [online] (cited 23 February 2012) available from <URL: http://www.hayloftrestaurant.co.uk/>

Eliot House Hotel (2012) [online] (Cited 23 February 2012) available from <URL: http://www.eliothousehotel.co.uk/>

Direct Gov (23 February 2012) ‘The National Minimum Wage rates’ [online] (cited 23 February 2012) available from <URL: http://www.direct.gov.uk/en/Employment/Employees/TheNationalMinimumWage/DG_10027201>

Musgrove, N (2006) The Licensing Handbook: an essential guide to obtaining a license and running licensed premises (3rd Ed.) Fitzwarren, Aston Clinton.

Eliot House Hotel (2012) ‘Events at the Eliot House Hotel’ [online] (cited 23 February 2012) available from <URL:http://www.eliothousehotel.co.uk/events.php>

Appendices