Foodservice Prices Set to Rise!
Due to rising demand, product shortages, distribution problems, with a lack of delivery drivers, food service prices are under extreme risk of imminent increase as the hospitality industry gears up for the festive season.
Paperchase, the leading hospitality accountants in the UK, offers solutions
As hospitality looks toward a good festive trading period, all may not be rosy in the garden. Trying to recoup losses incurred during Covid, Christmas trading is crucial for the survival of many operators in the industry. The supply chain is blighted by chronic shortages, a lack of pickers of UK fresh fruit and vegetables, a shortage of HGV drivers, and insufficient stock due to post-Brexit imports.
Recent reporting from the CGA Prestige Foodservice Price Index suggest that prices of goods may rise by between 3% and 6% as a minimum from present time to early December, with bigger price hikes due, putting additional pressures on the bottom line.
Paperchase, the leading hospitality accountants in the UK explores a few market solutions.
With spiralling costs of foodservice goods, from an accounting point of view, it is essential operators have the most up to date insight into their weekly trading. It is crucial that you are aware of all running costs on a week by week basis and there are no surprises, because at the end of the month it is too late to take decisive action.
If costs are spiralling in one area that you cannot control, such as food services prices, there may be options that operators can take, subject to their circumstances, of course.
- Increase prices – The industry as a collective will either have to increase menu prices to reflect the upturn in raw material costs, or absorb the increase thus reducing percentage of profits.
- Realign operating procedures – Look to make savings elsewhere, however there may be little or no fat to save. Combined with staff shortages and forced Covid ‘app pinging’ many restaurateurs currently fail to generate sufficient revenue to operate, purely because they can’t staff their restaurants to the required level.
- Seek a cheaper supplier – In the current climate this may not be possible as all suppliers seem to be affected by the same market conditions.
- Implement a good inventory management system, such as StockTake Online, which will monitor your Spending Costs (with the help of recipes and consumption) and Inventory level via Stock Control Management. Whilst placing your order you can always select a supplier with a better price from the options available.
Whatever your actions, Paperchase provides it clients with the most comprehensive weekly reporting, enabling restaurateurs to check costs against profits, enabling them to make decisive changes to their operating procedures quickly and timely, making a difference in their businesses.
For more information on how Paperchase can help you contact:
T: 020 8633 7700