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Proposed tougher new allergen labelling laws safe guarding over two million food allergy suffers

Posted By Sterling Crew FIFST, FCIEH, FRSPH, CSi, strategic advisor to Shield Safety Group , 08 March 2019

Remarkably, on-premise food labelling on non-pre-packed or pre-packed are not currently required. This could change following a government consultation announced last week. The UK has over two million food allergy sufferers, and with around 7% of the UK’s children also having food allergies, it is an issue that is not going to go away.

To assess the potential impact of this and to provide a summary of the proposal we canvassed immediate thoughts from our strategic advisor, Sterling Crew FIFST, FCIEH, FRSPH, CSi.

“It’s all about giving the confidence back to the consumer in the safety of their food. The government launched this consultation to strengthen allergen labelling laws. Following on from the tragic death in 2016 of teenager Natasha Ednan-Laperouse, where this young girl died from a severe allergic reaction to a baguette, that was bought at a Pret A Manger airport outlet. The ingredients, or more importantly, the allergens were not listed on the baguettes packaging.”

UK food law permits no allergen labelling on products that are not pre-packed or which are pre-packed on the premises where they are sold. In fact, these foods are not required to carry any labels on ingredients at all and information on allergens is often given in person by the food business, only when asked by the consumer.

Sandwiches sold in supermarkets that are prepared off-site in manufacturing operations are fully labelled – their products outline the 14 allergens that consumers must be made aware of when they are used as an ingredient in food.

Product Labelling

Individual product labelling is the most effective way of communicating vital information for people with food allergies and may well have prevented previous incidents and tragedies.
Environment Secretary, Michael Gove, said: “We want to ensure that labels are clearer and that the rules for businesses are more consistent – so that allergy sufferers in this country can have confidence in the safety of their food.”

What are the key changes being put forward?

Food businesses selling pre-packaged food directly for sale could be required to follow new rules. The options put forward in the consultation to improve the way allergy information is labelled on these foods include:

  • Mandating full ingredient list labelling
  • Mandating allergen-only labelling on food packaging
  • Mandating ‘ask the staff’ labels on all products, with supporting information for consumers available in writing
  • Promoting best practice around communicating allergen information to consumers
What does this mean to the those in the food industry?

It will present some undoubted new challenges, especially for the smaller food companies. What is clear no matter how big or how small, all food businesses will have to the raise the allergen awareness of their staff.

For any new labelling requirements to work, it’s vital that staff are trained in allergen management to ensure the labels are accurate. It’s also critical to have an approach which opens up a dialogue with consumers. Some food allergens are not on the prescribed list of 14, such as Kiwi fruit and tomatoes. So, the best option is to ensure full labelling of all ingredients. This also helps consumers make a more informed choice, quickly and without feeling the need to ask, just in case.

In light of recent tragedies, it is integral for food retailers and those in hospitality to be proactive and review the robustness of their approach to the management and labelling of allergens. Everyone with a food allergy should have the information they need to stay safe. For customers to make informed decisions, businesses need to stay more informed.

 For more information - visit






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Making Tax Digital

Posted By DRJ Accountants, 05 March 2019

The way businesses are expected to keep their business records is set to change forever.

From 1st April 2019 all VAT registered businesses whose taxable supplies are above the VAT threshold (currently £85,000) will have to maintain digital business records which are capable of filing VAT returns directly to HMRC.  These digital records in their standard form must record every individual supply (sale) made by the business.

So, what does this mean for your business?

If you currently maintain your own financial records, including manual records, spreadsheets or non-MTD compliant book-keeping packages, you will need to change them to an MTD compliant software package which can link directly to HMRC to download your VAT return.  The current Government Gateway will not be available to file your VAT return through.  Therefore, from the first day of your VAT accounting period, which starts on or after 1st April 2019, you must be MTD ready.  

We are currently investing in both new hardware and software to facilitate a smooth transition so that you meet your obligations under MTD and take away the pain.

To avoid the need for your digital business records to record every individual sale i.e. every pint of beer, glass of wine, serving of steak & ale pie etc, we will maintain your records using the appropriate VAT Retail Scheme.  This scheme enables us to record sales in your digital business records at the gross daily takings level rather than on an individual sale basis.

Whilst this will substantially reduce the number of transactions recorded in your digital business records, it still represents an increase in the amount of information we will be obliged to process on your behalf. We will now have to record the sales from each day in your financial records rather than simply one weekly total from your cash sheet.  Fully completed cash sheets will become an even more important part of minimising processing time and therefore bookkeeping costs.

So, whilst the changes of the introduction of MTD are significant, the only impact you are likely to face will be a small increase in charges to cover the increased processing time.

And the future?

MTD for VAT is only the first stage in HMRC’s plan to make the tax system digital.  The second stage will be known as MTD For Business which will represent a fundamental shift in the way that both individuals and companies report their taxable earnings.  As things currently stand, this is scheduled for introduction in April 2020 and will involve the quarterly declaration of business profits via your digital financial records – now there’s something to look forward to!

As might be expected MTD will inevitably mean More To Do.

For more information, go to

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Payment of damages to guests – are hoteliers’ liable?

Posted By Boyes Turner, 28 February 2019
Updated: 26 February 2019

A rare decision has recently been reported on the Hotel Proprietors’ Act 1956.  The Act imposes a duty on hotel proprietors to make good the loss of a guest’s property unless they can prove the loss was incurred as a result of the guest’s own negligence.

Proprietors may limit what is otherwise strict liability by displaying a sign in a prominent place confirming the extent of their duty.  However, this does not apply where the loss is due to the hotelier’s negligence.  Anande v Firoka (King’s Cross) Ltd [2018] EWHC 3679 (QB) demonstrated the importance of ensuring that issues of security are taken seriously by hoteliers.  Simply relying on the fact that something is widely used and well regarded is unlikely to be sufficient to allow them to rely upon the limitation provisions. 


On 18 November 2015 Mrs Anade checked into the Holiday Inn King’s Cross.  She had with her a substantial quantity of jewellery and other property which she arranged to place in the room safe.  Whilst she was at dinner, her room was burgled. 

Prior to leaving her room, Mrs Anade had complained that her door had not been locking properly but when inspected by one of the hotelier’s employees she was told she needed to pull it firmly shut.  Following the burglary, the locking system was further inspected and was found to be working with no record of the door having been unlocked.

Mrs Anade contended that the hotelier had negligently failed to ensure the door locked effectively and sought damages from them. .

The hotelier contended that the room was secured with a “state of the art electronic proximity lock” which was in good working order and that no-one had entered the room without permission.

The hotelier disclosed documents relating to a series of thefts on 3 October 2015.  Rooms had been entered and property stolen in circumstances where there was no signed of forced entry and where the door locks were found to be in good working order and the records did not show any entry to the rooms.

The court found that Mrs Anade was only entitled to fixed damages pursuant to the Act. She appealed.

The appeal

The hotelier provided further documents relating to news reports which revealed a significant hacking problem allowing criminals to enter hotel rooms with such locks.    The Court found that the Recorder had relied on the fact that the locking system was widely used and well regarded .  However, the appeal court disagreed.  It said that once the hotelier had identified that rooms had been unlawfully entered by breaching the electronic lock it was incumbent on it to do something about that.  They found that the hotelier could not simply continue to rely on locks which it knew could be breached.  At the very least they ought to have warned guests about the known breaches. 

The court found that Mrs Anade had established negligence.  Guests were reasonably entitled to believe that the doors to their rooms would be secure.  By failing to adequately respond to the October thefts the hotelier was in breach of its duty.  












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Closing the gap on the candidate crisis in hospitality

Posted By Peter Willis, UK Director, Harri , 26 February 2019

According to the latest statistics from YouGov, 42% of new employees joining the hospitality industry leave their jobs in the first 90-days. Historically, our industry has employed a young workforce, however, with current demographic changes due to a diminishing working age population, this is no longer a sustainable strategy, as by 2020 we will have 670,000 fewer 16-25 year olds. So, what can we do as an industry to ensure we retain and nurture our current pool of talent, whilst attracting not only the next generation but also our future hospitality workforce.

Let’s firstly look at the main issues from an employee’s perspective. The perception is that working hours are long and anti-social, plus schedules are inflexible and don’t fit around lifestyles.  In addition, pay is considered low and the common view is that there is a lack of career progression.

Operators need to start broadening their talent pool. We not only search for prospective talent from within our industry, we are also a Funding Partner with Only A Pavement Away - a charity who helps not only the homeless, but also ex-service personnel, ex-offenders and those with learning difficulties to find a job within hospitality.  

Savvy operators are recruiting people who fit the personality of their brands – this is all about hiring the right attitude. I attended a conference towards the end of last year, where Laura Harper-Hinton, Co-Founder of Caravan, delivered a brilliant and thought-provoking presentation on her team which she called the 51%ers. Caravan recruit people with the same passion and values as the brand and then teach them the necessary skills to do their job. This attitude ensures staff grow, feel part of and stay true to a brand.

Using technology to recruit intelligently will be critical to our future. Intelligent learning software also means operators can utilise scheduling systems which are smart enough to remember employee shift preferences, whilst also enabling that all important shift swap.

We live in an age of mobile phones. Today’s smart technology means that it is possible to make the recruitment process entirely mobile friendly. Tools such as instant chat and interview schedulers that connect to calendars, give General Manager’s valuable control of their site recruitment, whilst still having oversight of the process.

Operators need to be looking at innovative ways for candidates to engage with their brand. Think outside traditional job boards and step into the real world of video and social media applications. Today, it is possible to have digital ‘Refer a friend’ schemes that not only reward and celebrate employees as brand advocates, they also give operators access to an invaluable new talent stream, who might otherwise have not been considering a job within hospitality.  

A leading UK pub operator has recently quoted that those employees hired through ‘refer a friend’ are 80% more likely to remain with the brand for over a year.

To win the war on talent, operators need to remember that business performance is driven by employee performance and those who invest in their people will be the ones reaping the benefits.

For further information about Harri visit












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Wake up to the hotel of the future with Zonal F&B technology

Posted By Tim Chapman, Sales Director at Zonal, 15 February 2019

Having been in sales for more years than I care to admit, I have probably spent as much time in a hotel bedroom as my own bed.  And what my experience tells me is that hotels are missing a trick when it comes to using technology to make the guest experience more personal, convenient and dare I say it, even fun.

I’m not just surmising; our GO Technology research supports this view.  Of the 1,500 frequent hotel customers polled in our latest research conducted by CGA, technology comes into play when booking a room and the preferred method is via a hotel’s own website (67%).  However, this is where the technology journey for guests seems to end. 

My personal experiences certainly marry with the GO Technology findings.  I find it baffling how little technology I can use to make my stay as hassle free as possible.  After a long day of meetings and an inbox bulging with unread emails, I often just want to kick-off my shoes and relax in my room. 

However, room service is often costly, there’s not much choice and the food can be lukewarm at best, when it finally arrives.  I seem to be in good company.  GO Technology indicates that during their stay, well over half of consumers have never used tech to order room service (70%) and more than a quarter (28%) consider ordering or paying for it to be a challenge through the traditional methods.

So, if these consumers are anything like me and without any incentive to do otherwise, they are probably ordering from one of their favourite high street restaurant brands and getting it delivered through Deliveroo or Uber Eats.  In fact, our research shows that 28% of British consumers are ordering more food deliveries than they did a year ago and this trend is growing by the day. Let’s face it – it’s not only convenient, but I get the food I want, often at a lower cost than what the hotel has to offer.

I do ask myself, therefore, why are hotels in the UK so behind the curve, compared to restaurants and bars, when it comes to adopting technology to build sales and guest loyalty?   

For example, I can count on one hand the number of times I’ve been able to use a technology solution to avoid the check-in rush.  It’s so frustrating!  Three in five (60%) consumers say they have never used an iPad or similar to check in to a hotel, although there is clearly demand, with nearly half (45%) wanting to see automated check-in in the future. 

Other figures within GO Technology that resonate with my experience include the fact that people don’t use technology to reserve a hotel restaurant table (64%) or pre-order food and drink (63%). These figures contrast sharply with the restaurant and pub sector, where smartphone pre-booking and order-and-pay are now firmly embedded.

Online reservations through hotels’ websites, apps and third-party platforms have transformed the way consumers discover and engage with hotel brands, and automation is starting to emerge at check-in. But beyond those first few steps in the customer journey, the hotel experience is generally much lower-tech.

There is a clear opportunity for hoteliers to use mobile-friendly and in-room technology to facilitate the customer journey.  Not only are there financial gains to be made from additional income generated from on-site food and beverage sales, to activities such as spa treatments and trips.  Pre-order and pay has quickly become the norm within hospitality and consumers are expecting the same type of service when staying at or visiting a hotel. 


  Access a copy of the full report here.



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More than Money: Ways to motivate, retain and attract staff in turbulent times

Posted By P&G Professional , 13 February 2019
Updated: 12 February 2019

UKHospitality (UKH) and Procter & Gamble (P&G) Professional team up to deliver an online workshop to support managers in hospitality to get the most out of their vulnerable resource, their people.

The free, educational webinar, will take place on Thursday 28 February, at 13:30.

The webinar will bring together a panel of renowned industry thought leaders, to share practical examples of how to create a more positive working environment, with a focus on how to retain staff during the first two years of employment – a critical time period as currently over 50% of hospitality employees leave their workplace during this timeframe.  

Brexit and the surrounding uncertainly has created new challenges in the hiring and retention of staff in the hospitality industry. These issues will be explored during this webinar, with practical tips given on how to keep staff motivated during potentially turbulent times.

The webinar speaker panel includes:

  • Kate Nicholls, Chief Executive of UKHospitality (UKH) 
  • John Keating, General Manager of Fairmont Resorts, St. Andrews 
  • Liz Smith-Mills, FIH, MBICSc, is an independent housekeeping consultant and member of P&G Professional’s Advisory Council 
  • Greg Elmore, UK & Ireland Sales Manager at P&G Professional
 Greg Elmore describes what managers will get from tuning into the webinar; ““We believe that every experience counts, and that includes the experiences and interactions your employees have at work.  With political uncertainty making some employees feel anxious about the future, it is more important than ever for companies to focus on the welfare of their people. This webinar will provide case studies for how to motivate teams and how to create and maintain a happy workforce.”


Click here to complete the registration to avoid missing out on this informative webinar.  





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In these turbulent times, it’s more important than ever that our great industry gets together

Posted By Casual Dining – the industry’s favourite trade show returns on 27-28 February, 12 February 2019
Casual Dining is the definitive trade show for the UK’s restaurant, pub and bar sector. Over 5000 trade buyers will gather at their annual industry event this month on 27-28 February at ExCeL London, to meet over 220 food, alcohol, soft drink and equipment suppliers, from big name brands to smaller start-ups.

Casual Dining gives senior decision makers the unique opportunity to discover new products and trends for their business, hear keynotes from the biggest restaurant operators, and all whilst networking with a who’s who of the industry!

New venue, new trends

Event manager Eva Ellis explains: “Casual Dining is the only UK event that annually attracts so many leading innovators, influencers, trailblazers and decision makers from across the sector together in one place at one time.  It’s proved itself year after year to be an essential visit to see what’s new and compare the latest products from leading and emerging suppliers. 

“At its new home of ExCeL London, it’ll showcase its biggest and most eclectic exhibitor line-up yet.  Around one in three are new to the show, including Scotland Food & Drink (who are hosting a new pavilion), Diageo, Honest Drinks by Coca-Cola European Partners, Hellmann’s, Deloitte, Purezza, Pedrino, Real Kombucha, f'real shakes and smoothies, Spirit Cartel, Sea Arch - Not Gin, Coffee World (UK), Biff’s Kitchen, and Futura Foods UK. 

“Then there’s 100+ returning exhibitors adding their latest NPD: Reynolds, Lamb Weston Meijer, Nestlé Professional, Kraft Heinz Foodservice, McCain Foodservice, Harri, Schweppes, UCC Coffee, Fentimans, JJ Food Service (Lavazza Coffee), Arla PRO, Yumpingo, The FoodFellas, AAK Foodservice, Pidy, La Tua Pasta, FrieslandCampina, The Culinary Food Group, Brita Vivreau, 3S POS, MCS Technical Products, Nelson Catering, Colour Heroes, Eden Furniture, Jenpak, Bookatable By Michelin, Bizimply, and ApicBase, for example. 

“We’ve also expanded multiple product categories this year – so look out for more plant-based alternatives, meat, fish, ingredients, desserts, alcohol, soft drinks, foodservice software and apps.” 

Big name Keynotes

Thanks to the addition of a second Keynote Theatre for 2019, visitors will be able to enjoy even more free content from some of the industry’s most inspiring business leaders, as well as essential insights and market updates.

Casual Dining’s high-profile seminar line-up includes CEOs, MDs and senior directors from some of the UK’s biggest and most well-known restaurant chains – including Dishoom (Shamil Thakrar), BrewDog (David McDowall), Carluccio’s (Mark Jones), Hawksmoor (Will Beckett), Mowgli Street Food (Nisha Katona), Loungers (Alex Reilley), Pizza Pilgrims (Thom Elliot), MEATliquor (Scott Collins) and PizzaExpress (Jane Treasure).

Also making their debut are: head marketeers from wagamama (Andre Johnstone), Bill’s Restaurants (Lesley McIlroy), and Las Iguanas (Lucy Harwood); operations directors from The Ivy Collection (Baton Berisha), YO! (Jo Childs), Browns Brasserie & Bar (Dave Lewis), and Pizza Pilgrims (Gavin Smith); plus wagamama’s executive chef Steven Mangleshot.

As in previous years, market updates will be provided by Kate Nicholls (UKHospitality), Simon Stenning (, Fiona Speakman and Chris Jeffrey (CGA), and Peter Backman (see the show’s website for full timings and further seminar details).

For more information and to register for a free trade ticket to Casual Dining 2019, please visit and use priority code CD128.

 Essential info:

 Opening times – 10am to 5pm both days (last entry 4pm)
 Dates – Wednesday 27th and Thursday 28th February
 Venue – ExCeL, London
 Website –



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2019: An Opportunity to Excel in Tough Times?

Posted By Jon Midmer , Managing Partner of JMA, 24 January 2019
Updated: 22 January 2019

As we enter 2019, I await with interest to see how developments in the UK hospitality industry will unfold. As the leader of a hospitality-focused executive search firm, even though this will almost certainly be a year of considerable political upheaval, you’ll have to forgive me if my main interest is in the top industry movers and shakers. 

What will the arrival of a new CEO at Greene King herald? What can we expect when the CEO baton is passed on at SSP? And what will change, if anything, with an internal promotion to Chief Executive at Wagamama?

A trend I’ve observed in the past few years has been F&B executives heading to the leisure sector, such as moves from Domino’s to Saga, Spirit to Rank and Bill’s to the world of bowling. And last year Bourne Leisure recruited from Prezzo and Greene King. Why so many heading for the exit? 

For one, maybe because it’s just heavier going in the F&B sector than it has been for many years? Another reason behind leisure players hiring casual dining, pub and fast-food executives, might be that these days you can’t have a great leisure experience without a compelling, well-executed F&B offer. In parallel, food-led hospitality players have realised that, however great your menu, you need a great leisure experience to go with it, be that in store or online. 

Any predictions for 2019? A CEO I had breakfast a month or so ago, whose opinion I highly respect, summed it up well when he said it will be a year for “doing what you have to do before doing what you want to do”. A sentiment, I believe, that will be shared by many. 

While 2019 will undoubtedly be another year of significant challenge, as much as I have sympathy for those who are struggling, would it be fair to say that some of these challenges are self-inflicted and the result of hasty expansion, a lack of investment in people and brand, not fully confronting the challenges posed by delivery and digital, misguided leadership and over-leverage?

If they weren’t, we would not be witnessing the continued outperformance from the likes of Nando’s, McDonald’s, Gregg’s and Wagamama in the big league and Loungers, Dishoom, Caravan and Honest Burgers in the all-comers category. I know for a fact that all of these businesses think customer-first, have differentiated propositions, provide excitement and value, and are well run by great leaders with a real sense of purpose. I predict that these operators, and their leaders, will continue to enhance their reputations in the year to come.

Paula MacKenzie, GM of KFC UKI, one of the brightest stars in the industry, in an interview in The Times a couple of months ago, summed leadership brilliantly in three words: “People and strategy”. I would argue that this year, maybe even more so than in 2018, the very best leaders need to get both of these elements right to succeed. Of course, great execution is key if you are to keep customers coming back for more.

In 2019, therefore, I predict that conditions will never be tougher, nor will distinguishing yourself as an operator, or a leader, harder. However, for those with the stomach for it, surely this makes 2019 a supremely exciting challenge for those wishing to excel in tough times?

Jon Midmer
Managing Partner of JMA
an executive search firm specialising in the hospitality sector

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New Year’s Revolution! Recover From Christmas Overindulgence

Posted By Lina Olea, UKHospitality, 21 January 2019

It’s January. Christmas was great but has taken its toll on your body again. You are starting the New Year tired, a little heavier than you were three weeks ago and having drunk too much after over a period of overindulgence.  Fortunately, for those in the drinks industry, the Licensed Trade Charity is on hand to offer guidance to get back to the pre-December you.

This is just one of the areas of health the Licensed Trade Charity can help with, alongside more serious issues such as dealing with serious illness, coping with disability and substance dependency. Through the charity’s free 24/7 helpline and website which provides over 60 help sheets on a variety of topics, pub, bar and brewery workers can get a range of support on not just health advice but money, housing and mental health too. In the meantime, here are the charity’s tips on countering that Christmas overindulgence…

The Association of UK Dietitians say that the average person in the UK consumes around 6,000 calories on Christmas Day alone – between 2-3 times the guideline amount – with possible weight gain across December of 5lbs1.

This is often washed down with excessive amounts of alcohol. According to a YouGov survey, nearly half of men and almost a third of women drink over the recommended daily allowance over Christmas Eve, Christmas Day and Boxing Day2, with an overall alcohol consumption increase of 41% across December as a whole3.

Whilst Dry January seems to be an ever-increasing movement, there are other steps you can undertake to help reduce the effect of alcohol consumption – allowing you to still enjoy your favourite tipple without giving it up completely. These include:

  • Help your body clear out the alcohol by drinking plenty of water between alcoholic drinks, or alternate them with soft drinks. It is estimated that your body needs four-parts water to every one-part alcohol to remove it from your system. 
  •  Drink slowly. This gives your body – and more importantly your liver – time to metabolise and flush the toxins from your body.
  • Have at least two, and ideally more, alcohol-free days each week.
  • Downsize your drinks - if you’re a beer-drinker, make the units go further by drinking halves instead of pints. If you’re a wine-drinker then opt for a smaller glass.
  • Never drink on an empty stomach as this floods your body with alcohol and forces your liver to work too hard. Make sure that you eat carbohydrates and fats before drinking alcohol to line the stomach, prevent nausea, hangovers and to help avoid getting drunk. Food will also absorb some of the alcohol, thereby slowing its delivery into your blood stream.
  • Sign up to Club Soda, the mindful drinking organisation. You can join online for free to receive eBooklets on setting goals and tracking your progress, and gain support to change your lifestyle. 

Many people will be wincing when they step on the scales in January and setting themselves fitness related resolutions. Here are a few very achievable goals you can make to cancel out the over-indulgence:

  • Be active – burn off the extra calories you have taken on by gardening, dancing, or going for a walk. If you are popping to the local shop, think about walking there and back rather than automatically reaching for the car key.
  • Track your exercise – free apps such as Runkeeper or MapMyRun can be used for walks, bike rides and more, and help you see how far you have gone and how fast – giving you a goal to beat for next time and added motivation.
  • Serve your food in reverse. Most people start with the ‘naughty’ foods leaving little room for vegetables. But by dishing vegetables up first and ensuring they fill half of the plate, you can more easily control the amount of the less healthy items that accompany them.
  • Count your chews! Chew every mouthful 20-30 times as this breaks the food down more allowing it to be more easily digested. It also slows you down so you realise you are full sooner, and not when it is all too late.
  • Eat oily fish such as salmon and mackerel each week which can help prevent heart disease

But it isn’t just the overindulgence that has a negative effect on our wellbeing by the time January arrives. According to the Sleep Council, we lose over 30 hours of sleep over the festive period4 – equal to four nights of solid sleep – a considerable amount that can render you irritable and less effective at work. January is the perfect time to get back on an even keel by:

  • Try to get back into a regular routine before bed, and instead of ‘cramming’ sleep with one really early night, try to go to bed a little earlier each night to gradually restore your sleep reserves. 
  •  Make your bedroom a technology-free zone. Don’t watch tv in bed, or look at your phone or laptop – the brightly lit screens of phones and computers can decrease the amount of melatonin released at night to help you sleep.
  • Aim to get 7-8 hours sleep every night

For a whole range of help sheets on all health issues from improving your work/life balance to coping with illness and accidents, go to


John Phillips 
01344 884440




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Inhospitable times for hospitality – manage your property portfolio to weather the storm

Posted By Helen Wheddon, Partner and Head of Real Estate Disputes at law firm Stevens & Bolton LLP, 27 November 2018

Conditions are currently very challenging in certain parts of the hospitality sector and casual dining has been hit particularly hard. Many well-known brands have suffered due to a significant shift in consumer spending habits and other external factors, including business rates hikes and wage increases, have created a perfect storm.

So how can the hospitality sector weather these conditions? A notable trend in the current climate is the rise in the number of Company Voluntary Arrangements (CVAs). Casual dining brands in particular have been keen to take advantage of the benefits that CVAs offer. Just this year, Jamie’s Italian, Prezzo, Gourmet Burger Kitchen, Byron and Carluccio’s have all entered into CVAs.

What do CVAs offer? A CVA is a way for a struggling business to restructure and/or reduce its debts and outgoings, and it can be particularly useful for businesses with a significant property portfolio. Restaurants and other hospitality businesses trading from a number of different locations can use the process to agree rent reductions for premises they wish to keep, and potentially early terminations of other less profitable sites.

The key feature of a CVA is that if the proposed restructuring is passed it will bind all creditors, even those who voted against it. Landlords often complain that these arrangements affect them disproportionately and unfairly, forcing them to accept lower rents and preventing them from taking action to recover past debts or even taking back their premises. But, the other side to this argument is that the purpose of a CVA is to keep a business out of more formal insolvency arrangements like administration or liquidation and landlords may recover more under a CVA than if the business went under completely.

What are the alternatives? CVAs have been dominating the headlines, but there may be other options for struggling operators to reduce or restructure their property liabilities. Property overheads can be a significant cost to a business, so good legal advice when taking on premises is essential to build in some flexibility that may be needed down the line if conditions change. Tenants with well-located premises may want to assign their leases to another business that wants the site, without onerous conditions attached such as continuing guarantees. A well advised tenant will have negotiated a break clause in its leases so it can exit the lease early, or use the threat of exiting as an opportunity to negotiate better terms with the landlord. Negotiating a rent concession or reduction may be an option and a flexible landlord might allow a move to monthly from quarterly rents, which can help with cashflow and allow the business to survive for the mutual benefit of both parties.

Stevens & Bolton LLP is a full service, top 100 UK law firm. If you have any queries about your premises, what your options might be or would like to know how the Hospitality team at Stevens & Bolton can help your business, please click here to visit our website for more information.

Alternatively you can click here to contact Helen Wheddon, Partner and Head of Real Estate Disputes, directly. Helen advises on all areas of landlord and tenant work and specialises in advising corporate occupiers on their property portfolios.





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