We all live in hope, but it was always a safe bet that 2022 would start with the eating-out market no less challenging than it was during 2021.
Operators who had seen lower sales and the cancellation of bookings in December the omicron variant of covid spread, went into the new year knowing that trade tends to be quieter in January and February even in the best of years.
Rising costs continue to be the biggest issue facing operators. The latest inflation figures show that the average price of a restaurant meal was up by 6.3% year-on-year in December, ahead of the overall 5.4% rate of inflation, and prices for many menu staples have increased.
Staffing costs are also an ongoing issue, with the official employment data showing that the ‘accommodation and food service sector’ – which is the way hospitality is recorded in the official measures – had more than 160,000 vacancies in the last quarter of 2021. That puts upward pressure on wages, even before the annual increase in the minimum wage, due in April.
However, there is also cause for optimism. Covid restrictions have been eased, and research shows that consumers are becoming more confident about eating out. The best advice to operators is to focus on the costs that can be controlled, and one of those areas is purchasing.
By working closely with suppliers, and applying some basic buying discipline, it’s possible to manage food and drinks cost, and avoid unexpected bills. Practical steps include:
- Plan your orders. With transport and delivery costs high, fewer, bigger deliveries are far better value than frequent small ones, and some suppliers have raised their minimum order level. Place orders as early in the day as possible rather than just before the cut off, as this helps the supplier manage stock and enables operators make most of availability;
- Talk frequently to your fish, meat and fresh produce suppliers to get the best value from the products available, which can change frequently. Be ready to use less popular cuts or less familiar fish species, which can be better value;
- Keep menu descriptions flexible, e.g. ‘catch of the day’, ‘home-made pie of the week’, or ‘served with seasonal veg’;
- With staffing costs rising, consider the benefits of asking suppliers to do some of the prep, such as filleting fish or trimming steaks to size before delivery. This will cost more, but also cuts kitchen costs and helps reduce food waste;
- Feature better value products such as burgers, meatballs and fishcakes on menus. These can be made with the offcuts and trim from premium cuts, are popular with customers, and generate good margins;
- Be aware the challenges go beyond food, with everything from glassware and crockery to kitchen equipment costing more and taking longer to deliver. By speaking to suppliers about availability, and planning orders, it’s possible to get better value.
Every operator faces similar challenges, so those that can take a disciplined approach to menu planning and purchasing will have an advantage. With inflation as much of a concern for consumers, even a small advantage in terms of menu pricing may make the difference to where they chose to eat out.