Hospitality remains stretched by rising prices

By Shwetali Sapte

- Last updated on GMT

Hospitality remains stretched by rising prices

Related tags Fourth Inflation Foodservice price inflation Hospitality

Supply chain fragility continues to hit hospitality, with the cost of goods sold at 27.3% in February 2023, an increase of more than five percentage point in less than two years, according to new data from Fourth.

Its Impact of supply chain fragility on hospitality​ report found the price of daily essential items rose at historic levels between May 2022 and 2023.

The report is based on data collected from pubs, bars, restaurants, and hotels with a combined estate of more than 1,500 sites and a combined spend of £750m with 200 suppliers.

It found milk is up 36%, followed by bread at 22%, flour at 19%, and eggs at 17%. Meat prices have also risen sharply, with chicken at 5% and beef at 6%, while drink prices have proved more robust with lager and red wine up 4% and white wine by 5%.

Overall food inflation was 19.1% in the 12 months to March 2023 – a 40-year high outstripping CPI of 10.1%, according to Fourth.

The gap between what operators are anticipating they will spend on food and the actual price they pay is also growing, with theoretical cost of goods sold rising from 18.2% in May 2021 to 22% in February 2023.

 “The data in Fourth’s latest report reveals the extent of the challenges hospitality businesses continue to endure. However, there is hope on the horizon with energy prices and inflation both forecast to head south this year," says Sebastian Sepierre, managing director – EMEA at Fourth.

“Hospitality executives must also continue to examine every aspect of their business to futureproof their operations. This is where embracing technology in the form of data-driven inventory management plays a significant role. It provides the most efficient way of comparing and changing suppliers, checking product availability and knowing exactly when stock needs to be replenished”.

“Food price inflation is undoubtedly one of the most pressing issues the industry faces, and it is essential to have the right tools at hand to tackle it head on. Technology can play a vital supporting role in helping businesses navigate the various challenges that continue to plight the hospitality landscape”.

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