When it comes to the prospects for the nation’s hospitality sector, your glass is either half full or half empty. The past few years have presented the perfect storm for pub, bar and restaurant operators, with a combination of pandemic lockdowns, Brexit, inflationary pressures, tighter regulations and the inevitable belt-tightening among consumers making it increasingly challenging to earn a decent crust. Margins have become wafer thin in a sector that has historically generated some pretty healthy profits. Bar closures have spiralled to record levels as many publicans have simply thrown in the towel. Cash-strapped punters fearful at the prospect of the £10 pint have opted to make merry in the comfort of their own living room. Against this painful backdrop, Nic Wood, the owner and managing director at Edinburgh-based Signature Group, is not prepared to batten down the hatches and pray for calmer conditions. Indeed, he has been investing heavily in the business, which runs some 20 bars, restaurants, hotels, a nightclub and a brewery, with venues in Aberdeen, Bridge of Allan, Edinburgh, Glasgow and St Andrews. We meet in one of the group’s most familiar hostelries, The Huxley in Edinburgh’s bustling West End, which, along with its sister boutique hotel The Rutland and eatery Kyloe, was relaunched earlier this year following an extensive £1.2 million overhaul. Wood insists that ploughing money back into the business and offering something fresh is essential to retaining custom and attracting a younger generation wedded to smartphones and social media. “I don’t think it’s getting any easier,” he confesses. “At certain points we were looking at shutting certain pubs in order to keep the more profitable ones open. Then we went through a stage of perhaps only opening profitable hours. The minimum wage going up each year is perfectly acceptable but the problem is we can’t put up prices the same way. “Anybody supplying you something is not doing so at the same price as two or three years ago. They will tell you it’s Ukraine or whatever else but there are so many things that have all been massively affected.” As well as the seven-figure sum pumped into The Rutland, The Huxley and Kyloe, Signature has recently completed a £400,000 makeover of one of Aberdeen’s most popular bars and live entertainment venues – the Paramount on the city’s Bon Accord Street. Strobe and neon lighting, animal print seating, sharks coming out of the walls and “juicy lip urinals” have been incorporated in an effort to entice the Granite City’s students and twentysomethings. “The Paramount was always doing pretty well,” observes Wood, who is the son of millionaire businessman and philanthropist Sir Ian Wood. “We always wanted to keep those students and keep the imagination going and it’s worked really well since it reopened at the end of August. If I had ten Paramounts I would be smiling.” Born and bred in Aberdeen, Wood moved to Edinburgh to study business and marketing at Napier University. Having worked in pubs in one way or another since he was a student, he recognises the challenges in building a new customer base. “When we went out we were catching up with pals that we hadn’t seen all week and we would be busy talking away for the first couple of hours with them,” he reflects, “but that’s essentially what Facebook or Instagram is doing now. You are trying to get Generation Z into the pub and you really have to give them something to come there for – stuff that they can’t recreate on their phones. It’s all about building a rapport with the customer and making sure that they want to come back.” Signature – whose other venues include The Black Bull in Edinburgh’s Grassmarket and The Saint bar and kitchen in the Fife university town of St Andrews – was a founding member of the Scottish Hospitality Group, which campaigned heavily and spoke up for the sector during the pandemic. Upon reflection, it’s a period that Wood describes as “very frustrating” with some of the later rules surrounding where and when people could eat and drink hitting bar operators particularly hard. “We all became ridiculously knowledgeable on everything that had to do with health and safety,” he says. “People made those decisions at the time and you always knew that with hindsight, however many years later, some of them were probably wrong.” Wood remains concerned about the role of government in nurturing enterprise and the prospect for tougher regulations and increased taxation as the public sector spending screw tightens. Our meeting in the capital takes place shortly before it emerges that employers could be facing higher national insurance contributions at this month’s autumn Budget. Scottish business leaders have warned that such a hike would be “costly and painful” and could lead to job losses. Wood also highlights the burden presented by an increasingly punitive business rates regime. “What you find in a lot of town centres is that all the small retailers in a street are paying less than the one pub between them. We are getting done on sales and not square footage,” he warns. “You’d think given how much in tax from everything in hospitality that goes back to the government, they would want to support it a lot more than they do. “We are simply not seeing the sort of returns you saw before. And those returns would go into the next pub, the next set of builders that we use, the next group of staff that we train up, the whole thing – that’s how you build a business. That’s the challenge and I don’t think governments realise how much of a challenge that is these days.” Edinburgh west end boutique hotel and eateries get stunning £1.2 million makeover
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