Responding to the latest figures from the Office for National Statistics (ONS), which show the UK inflation rate rose to 3.3% in the year to March, Kate Nicholls, chair of UKH, warned that hospitality businesses ‘are highly exposed to increased fuel prices, through the price of food, drink, transport and other key inputs’.
The ONS attributed rise in inflation to increased fuel prices caused by the ongoing US-Israel war with Iran.
Motor fuel increased by 8.7% month-on-month, the largest increase since June 2022.
Food inflation, meanwhile, rose from 3.3% to 3.7% in the year to March, driven by rises in the price of chocolate and confectionery, meat, fish, and soft drinks.
Nicholls says that without support, businesses will have to once again raise prices, further driving inflation.
“As one of the final links in the food supply chain, the sector cannot be expected to pick up the bill for increased costs down the chain,” she says.
“Hospitality is already one of the most heavily taxed sectors in the economy and there is no room to absorb further cost increases. Ultimately, it will result in price rises at the till, further driving inflation.
“The impact on consumer demand should be closely monitored, as our pubs, restaurants, cafes and hotels will be the first to feel the combined hit of increased input costs and reduced spending.
“The Government should be looking closely at how it can reduce the cost of doing business for demand-sensitive sectors like hospitality, which are uniquely exposed to these kinds of economic shocks.”