With the Bank of England having downgraded its economic forecasts once again this month, it’s clear that hospitality businesses will have to plan both for cash-strapped, cautious consumers, and rising costs for food, drink and other essential goods and services, for some time to come.
The official expectation is now that inflation is expected to rise to just over 13% in the final quarter of 2022, and to remain high throughout much of 2023. The Bank expects inflation to return to the target 2% level sometime in 2024, but its forecasts have already had to change several times. The continued impact of factors such as the labour shortage, covid and disrupted supply chain is compounded by the effects of the terrible war in Ukraine, the duration of which is something no economic forecast can predict.
Staple products such as wheat, dairy, meat, fish and fresh produce are all affected by rising prices and supply disruption. As the harvest approaches, the long spell of hot, dry weather has also had a significant effect on many crops, which are smaller and poorer quality than expected. Non-food products, as well as services such as energy and utilities, are also seeing costs continue to rise.
In addition, operators will know only too well that all the political debate is focused, perhaps understandably, on how to help consumers through the challenges that lie ahead. Despite calls for support from all the trade bodies that represent the sector, there is little sign of much practical support for businesses.
All of which makes it sound like there’s very little that individual operators can do to help themselves to trade though the most challenging market conditions most of us have ever experienced. When it comes to the big picture, that may be the case, but as we have been emphasising, there are small steps that can combine to make a significant difference.
We’ve also developed some practical tools to help operators start to take those steps. These include:
- The Seven Habits of Highly Effective Purchasing Teams – New 2022 Edition – this is an updated version of our popular Insight Guide, reflecting the challenging new landscape the hospitality industry now has to navigate. Efficient, cost-effective purchasing has never been more vital, and this Guide challenges many of the bad habits that operators can easily fall into, as well as emphasising goof practice.
- Surviving Winter 2022: As energy cost soar, hospitality operators need to look at every plug, device, and gadget used in the business, and revisit every process from switching on in the morning to switching off at shutdown to save costs. Compiled with the help of our energy partner, this guide will help you better manage soaring energy costs this winter.
- The Market Forecast: Published three times a year, the Market Forecast looks not only at the products that are likely to see pricing challenges, but also where operators can find the best value by buying food and drink when it’s at its best in terms of quality, value and availability.
- The GP Calculator App: The essential tool for very kitchen. Now more than ever, with prices so volatile, chefs and managers need to have a clear view of menu pricing and adapt where necessary. Available to download for Apple and Android, the Lynx Purchasing GP App enables operators to quickly calculate menu prices based on target GP, or the GP achieved based on menu price.
As always, our advice is to keep talking to suppliers, ensure that they understand what’s happening in your business, and give them the opportunity to offer advice and support. It’s likely to be a tough road ahead, but working together is the way to get through.