Use smart solutions to cope with food price inflation
Soaring inflation is hitting all sectors of the UK economy, but once again, the hard-pressed hospitality sector is bearing the brunt.
A new survey has revealed that in the food service sector, the inflation figures for June stood at 11.5 per cent. In the same month, the economy-wide figure stood at 9.4 per cent, more than two points down.
It is a time for hospitality venues to get serious about how they can mitigate the potential damage with creative solutions.
The latest edition of the CGA Prestige Foodservice Index showed all 10 food and drink category costs moving upward year on year.
In a further blow, the three categories of fruit, dairy and oils & fats— rocketed to a figure of 20 per cent.
The war in Ukraine and a looming drought situation brought on the heatwaves across Europe are all contributor factors as prices surged month-on-month.
Beyond the UK, drought is already a major problem in Italy, with crops including tomatoes and durum wheat already affected, and conditions across the rest of the EU are also causing concern.
Hospitality venues can adopt measures to mitigate the problem and these could include:
- Always keeping on top of inventory. Software that automates important calculations, can help build profit, monitor and reduce food waste and improve your ordering processes.
- It seems obvious but cutting food waste. Throwing away food is throwing away profit, with estimates that food costs account for around 28 to 35 per cent of a restaurant’s total cost. Close monitoring will identify what is not being used and action can be taken.
- Being creative with menus: Some ingredients are extremely expensive and any turndown in business could leave produce unsold, hitting the bottom line. Does lobster really need to be on the menu? Can it be substituted with something attractive, but less expensive?
- Using software to your advantage: Your Point of Sale (POS) information is critical and by integrating it with inventory management software. All the venue’s cost information is at your fingertips. This could be through the cost of dishes, sales revenue and how each dish is performing.
Commenting on the index, Prestige Purchasing CEO Shaun Allen said: “Instability continues to be the dominant feature of food and drink markets, and we predict that this will continue into 2023.
“It’s essential for operators to mitigate the impact on gross margins by investing in skills and resource levels to effectively manage this volatile environment. Doing so in a timely manner can eliminate even these high levels of inflation.”
For help and advice on related hospitality industry matters, please contact our team today.