As a knock-on effect from the cost-of-living emergency, businesses are seeing a fall in trade and customer levels. Coupled with raising inflation, a workforce crisis across the sectors, and remaining Covid pressures, many within hospitality and retail are struggling to remain viable with businesses shutting up shop every day.

Actions within the plan include:

• VAT to be reduced to 17%.
• Reinstate the reduced Tourism / Hospitality VAT rate to support businesses that rely on household discretionary disposable income and tourism spend.
• Restoration of the Business Rates Holiday which concluded in July 2022, running until April 2023.
• A UK wide reform of the business rates system to ensure online and out of town businesses are paying the same rate as high street businesses.
• Support from the UK Government for the devolved nations to reduce business rates by providing increased financial support through the block grants.
• The removal of VAT from energy bills to reduce energy costs.
• The Northern Ireland Executive to establish a Rural Town and Village Infrastructure Investment Fund to ensure our small and mid-sized towns and villages are supported during this economic crisis.

The action plan has been co-designed by Retail NI, Hospitality Ulster, Londonderry Chamber of Commerce, Bangor Chamber of Commerce, Ballycastle Chamber of Commerce, Ballymena Chamber of Commerce, Banbridge Chamber of Commerce, Belfast Chamber of Commerce, Causeway Chamber of Commerce, Lisburn Chamber of Commerce, NI Takeaway Association, Newry Chamber of Commerce, Newtownards Chamber of Trade, Omagh Chamber of Commerce, and Portadown Chamber of Commerce.

In a joint statement, the leaders of the 15 business organisations said: “We are at a critical juncture as a perfect storm of factors is causing devastation for the retail and hospitality sectors and could see thousands of businesses threatened over the next months if no action is taken.

“Out of control energy bill increases, labour shortages, inflation, National Insurance increases, and sky-high business rates – the highest in the UK – are risking the business climate of Northern Ireland. Fears that many will simply go under in the next months without government assistance are keenly felt and we cannot continue on this path of destruction any longer.

“We are pushing customers away due to having to raise prices to keep pace with these rising costs, which is therefore having a detrimental impact on trade and consumer confidence.

“Intervention is required by the UK Government, as well as the limited powers of NI Executive Ministers, to stave off the worst of this crisis on business owners and provide tangible support and resources that could keep trade viable.

“Our plan has achievable, tangible solutions that would support business from day one. Actions including a reduction in the VAT rate to 17% to encourage more households to spend on the high street; increased financial assistance through the block grant to alleviate the cost of business rates; and the implementation of the NI High Street Taskforce Report will help bolster business back to viable trading levels.

“We call on both Governments to consider our proposals and engage with the business community on how best to implement urgent actions that can alleviate these crippling pressures. It will support both businesses and consumers in this most pressing of times.”

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“UK Hospitality’s Next Challenge”, a study from Barclays Corporate Banking, shows that the release of pent-up consumer demand for socialising, holidays and experiences following the pandemic has given a boost to the sector.

Over three quarters (82%) of H&L operators from Northern Ireland are confident of growth this year and had predicted an average 30.80% uplift in revenue compared with pre-pandemic levels. This equates to a £0.7bn rise in annual turnover over 2019, and a £0.7bn increase on 2021.

However, the predicted growth could be stifled by soaring supplier costs and a scramble for talent. Hospitality and leisure businesses in Northern Ireland report that their utility bills have already spiked by 28% year-on-year on average.

Meanwhile, over nine in ten (94%) hospitality and leisure businesses in Northern Ireland are struggling to recruit personnel, with vacancies for cleaning staff (24%), masseurs (20%) and fitness instructors (18%) causing the most issues. There are particularly acute shortages of cleaners in the East Midlands and the East of England (28%).

Almost a fifth (16%) of bars and restaurants are finding it difficult to hire waiting staff, and over two fifths of gyms and leisure centres (42%) cannot find fitness instructors. Recruitment issues also extend to back-of-house and C-suite roles: 17% of operators are having trouble sourcing finance staff and 16% said the same about senior management positions.

In response, H&L operators in Northern Ireland are establishing new incentives to recruit and retain talent. Introducing bonuses (28%) is the most popular measure, followed by reduced working hours (22%) and increased wages/salaries (20%).

Almost one in five employers (19%) have also increased wages given to staff. Senior managers are set to receive the biggest boost to their pay packets, with an average increase of 7.7% – equivalent to £2,014³ a year for a full-time worker.  Delivery riders and drivers will receive an average increase of 7.5% (£1,616 per year for a full-time worker), followed by housekeeping staff (7.4% / £1,642), bar staff (7.3% / £1,145) and finance staff (7.3% / £1,936). Kitchen staff will receive a 6.9% rise on average, equivalent to a salary bump of £1,196 for a full-timer.

One striking finding of the research is the industry’s plans to offer employment to Ukrainian refugees. In Northern Ireland, 88% of surveyed businesses plan to hire refugees.

Barclays’ report also shows that, for the time being at least, the industry’s finances allow for pay rises and other investments. Profit margins of H&L operators from Northern Ireland are now at 28.70% on average, compared to 35.10% pre-pandemic. Caravan parks have enjoyed the biggest rise in profitability, from 37.1% in 2019 to 48.0% today.

Adrian Doran, Barclays Head of Corporate Banking in Northern Ireland, commented: “The hospitality and leisure industry was undoubtedly one of the hardest hit by prolonged periods of lockdown during the pandemic. In the early part of 2022 however, in a society free from restrictions, the sector enjoyed strong sales, leaving many confident about their growth prospects.

 “The worsening cost-of-living crisis is now a serious threat to that growth, with the latest Barclaycard Consumer Spending Index showing that restaurants, bars, pubs and clubs have all seen a slight decline in May 2022, compared to the month before.

“Crucially for the industry, our research shows that talent shortages are also a major concern, with businesses in every vertical finding it challenging to fill their vacancies. It means there is now an added imperative for hospitality and leisure firms to find new and novel ways to recruit, reward and retain their staff.”

Another key result from the research shows that almost a quarter (23%) of hospitality and leisure firms are offering more sustainable products and services than they were before the pandemic, and 32% say that an increased focus on sustainability has been their biggest learning from the past two years. To counter rising costs, 23% of businesses are applying price rises to less sustainable or ethical products.

Other notable findings from the “UK Hospitality’s Next Challenge” report include:

• Over a third (34%) of firms have invested in new customer relationship management (CRM) technology to offer a better customer experience, while 32% have started opening earlier.
• Two in five (38%) have started accepting new payment methods, such as Apple Pay and Google Pay and almost half (45%) of restaurants have introduced additional payment terminals, as have 42% of pubs.
• Almost one in three (30%) restaurants continues to diversify by introducing home delivery options, such as meal kits
• A quarter (26%) of H&L operators say they are selling more ‘value’ product ranges this year, followed by 23% who say they’re selling more locally sourced produce.

 This report is based on bespoke market research conducted by Censuswide among 605 senior managers within UK-based hospitality & leisure businesses. The sample covered businesses with 10 or more employees operating in a range of sub-sectors. The research was conducted between 8^th April and 25^th April 2022.

Barclays worked with Development Economics to assess the annual turnover of the hospitality and leisure sector based on ONS data and responses to the Censuswide research.

Potential annual salary increases were modelled by Development Economics based on official data from the ONS, with the exception of delivery staff, which used hourly wages for Deliveroo drivers as reported by jobs website Indeed.

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It’s hard to imagine a juicy steak without the accompanying crispy onions to add that extra savoury touch – yet the product is a relative newcomer to our supermarket shelves.

Richard Scott, who pioneered the product in Northern Ireland’s retail market, Scott’s Crispy Onions, told how it started as a small sideline to his family’s main business, wholesale fruit and veg merchants Sydney B Scott and Sons – but have really taken on a life of their own over the past decade.

“I was involved on the wholesale side up to 10 years ago and the crispy onions just started as a small sideline to all our other products linked to the fresh food industry that we were serving” he says.

“I wasn’t the inventor of the wheel at all – it has been done before, but we were the first to do it for retail use. It was a common product for some well-known restaurants who still do it today.”

Tobacco onions

Richard spotted a packet of tobacco onions in a shop in Co Antrim and asked the producer if he would make a few kilos a week for Scott’s.

But a former chef who was driving for the company, Darren, suggested he might be able to make it in-house instead.

“We bought him a hand fryer and we had a Portakabin in the yard. He finished his run at lunchtime on a Wednesday and cooked the product on a Wednesday afternoon and that was a couple of hundred packets a week,” Richard says.

“We were doing one afternoon shift, with one person and a hand fryer so we were cooking about a couple of hundred packets and just sticking a fruit and veg label on it. We called them tobacco onions in the early days.

“The product we made ourselves then was far better, far superior to the one I had bought off the other guy so over a period of time we found there were very good repeat sales for it.

“Nobody else was doing it and it was very well received and the guy who we had as a driver stopped driving completely for us and just started frying onions. He’s still there, he’s still the guy in charge of our operation and that was 10 years ago.”

Evolving methods

Nowadays there’s no question of using a single hand fryer – the company has evolved to using industrial fryers and a team of 25 members of staff making the crispy onions.

“We occupy the old Aghadowey creamery site which used to be owned by Lynas and we sold our premises in Coleraine to him. So now we’ve got a two acre site in Aghadowey – the fruit and veg is part of it and the crispy onion side is part of it as well,” Richard says.

“We’re doing upwards of 50,000 packets a week. So we supply the whole of Ireland and we do a bit of an export business to Denmark, Iceland, we do a bit into Dubai and we’ve sold to Australia to a guy who supplies butchers shops around Sydney.

“We do a lot of retail so my main customer base was into convenience stores. But butchers’ shops are the perfect fit, so we do up to 95% of the butchers in Northern Ireland through either agents or distributors or direct sales. Between us all, we cover the majority of butchers in the north and we cover hundreds down south as well.”

Diversifying flavours

The original flavour of crispy onion proved to be hugely popular, but the company also diversified into various flavours with some help from celebrity chef Jenny Bristow in the early days.

“Next to the original, the steak flavour would be the bestseller for us,” Richard says. “We do a Thai chilli, a sweet chilli, a salt and chilli and we do a bacon flavour as well.

“We also do a catering size which serves the hospitality trade – it sits on deli counters and serves hotels and restaurants. A hotel will not be able to do it unless they have a dedicated fryer, because making the onions ruins the oil, so you tend to find that unless they have the time and space to do it, it’s a mess – it’s hard to do and also get the quality right.

“So we’ve tended to offer it as a convenience product for the hospitality trade, and that saves them time and effort as well.”

Scott’s Crispy Onions partners with Lynas and Henderson’s Foodservice, which opens up hundreds of their customer businesses to them, and in the Republic works with Excellence to serve hospitality firms.

The wow factor

“Every deli counter in the north and south- Centra, SuperValu, Spar and Applegreen, has our product, so it serves very nicely for a wrap or a sandwich or a salad or whatever…  it adds that wow factor,” Richard says.

He admits the early days of the pandemic were a strange time for the company as it was hard to know what was going to happen.

“Thankfully our trade increased quite substantially over that period and we went from doing one shift to a two shift and that’s still in place,” he says.

“I think people were eating in more – hospitality was closed down so people were eating in and crispy onion was a great option for them to add to their meal. So we found business was better and busier since lockdown, and still is that way.”

Not only does the company sell under the Scotts brand but it also does own- brand products for a number of supermarkets, including Musgrave and Centra. It also supplies Dunnes, Tesco and Lidl.

Supply chain

Richard says they haven’t been hit by the supply chain issues that dogged many producers.

“We’ve been using a Spanish onion –  it’s a sweeter onion and a better product than our local one or an English one,” he says.

“The supply chain has been ok – costs have risen naturally,  but we haven’t increased any of our pricing. We’re in the process of automating the business more and that will bring more efficiencies into the business which hopefully allow us not to have to increase our selling prices to the consumer.

“We’re making the process more automated from the way it is at the moment – a lot of it is laborious and hand related and some of the tasks are manual.

“We’ve actually made a lot of bespoke machinery, there’s nothing out there to do what we’re doing. We were the first to get into the business because no-one did it before us in regards to that bulk.

“We’re doing tonnes of onions a week – nobody was doing what we’re doing and we’ve blazed a trail, as it were. Two or three firms started to do it after we started doing it but we’re always trying to innovate and we’re always trying to do new things. We’ve also got a snack-pot out now which we also serve in the hospitality trade as well, kind of a single use 40 gram tub for on the go or in the hospitality industry.

Skilled technique

There’s a skill to making the product, he says.

“The product is very much cooked by the eye, and that gives it that crispness and quality as well. It’s not something that you can just stick in an oven and just forget about – there’s a skill attached to it.

“Some have tried to replicate what we’re doing, and they just can’t get the flavour, the aftertaste, the presentation, and the shelf date right. All of those things are very much down to the skill of the chefs we have employed.”

One key question that immediately springs to mind is how the chefs cope with the more eye-watering qualities of the raw material.

“It’s very strange, it doesn’t seem to be an issue,” Richard says.

“Personally for me going into the factory, it does affect you, but those people who are working every day with it, it doesn’t seem to deter them. The tear ducts must get used to the onion.

“Some onions are quite strong in their odour, others are weaker, some are more moist, they’re all different but certainly it must be getting used to it.”

Family business

Scott’s Crispy Onions is very much a family business, and Richard’s son Christopher and daughter-in-law Jodie both work alongside him.

He also pays tribute to his late daughter Emma who worked with him in the early days of the company but was tragically killed in a road traffic collision aged 17.

“Anything I do now is a memorial to her name,” Richard says.

“Those things are the landmarks in life that you don’t expect to have but she was a believer, she was a Christian, so we’ve got that hope that Emma’s safe and well, and that’s a comfort to us as a family.

“Those kinds of things change your attitude and change your mindset and change your priorities as well in life. It’s not all about business either. We just try to do as good a job as we can.

“We like getting comments and in fact we got one today, from a customer who came across the product for the first time. And a guy last week in Dublin rang me, a man of 91 called Sydney who had discovered our product in Dublin and rang me to congratulate me on the wonderful product – he had one complaint to make and that was that he couldn’t put it down, he had to eat the whole packet until it was finished.

Encouraging feedback

“You get wee comments that kind of encourage you. We’ve got a premium product with a wow factor and a low-cost product at a high quality.

“We’re the first in the business which is very important, and we believe we’re the best in the business as well, and we just keep our heads down, do a good job, look after the customers and the repeat business is there to prove that the product is good.

Richard says there’s always something in the pipeline for the company: “We’re looking more to the UK and there’s potential there. We’ve another idea that we’re looking at at the moment which will be quite revolutionary, and we’ll be the first to do it, maybe in the world.

“I can’t disclose it yet, but we’re working with Loughry College and different ones like that to innovate and do different things

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