Food costs cause concern for business leaders

07-Jun-2017 - Last updated on 08-Jun-2017 at 16:04 GMT

Worrying times: business leaders are nervous about food prices

Related tags Economics

Rising food prices and business rates are major concerns for business leaders, according to the CGA Peach.

The quarterly CGA Confidence Survey, which takes soundings from 170 senior executives from the hospitality industry, revealed almost 80% of bosses were worried about rising food costs.

CGA Peach vice-president Peter Martin said the number had soared 11 percentage points since the beginning of this year.

As a result, almost half (49%) of those surveyed said they had already implemented price increases on certain food menu items, with 35% saying they had upped prices for consumers across the entirety of their menus.

Consumer confidence

Martin said: “Although to date, the public has generally continued to go out to eat and drink as normal, not surprisingly, more than half (57%) of senior executives are now worried about consumer confidence over the next six months.

“Only 8% of operators expect the public to go out more frequently in the next six months with 31% expecting an increase in spending – although this is down from 41% in February.”

Out of the 170 senior executives, two-thirds (66%) said they were positive about prospects for their own businesses in the coming 12 months. They were, however, far less optimistic about the market as a whole - with only 43% positive about the prospects for other people's businesses.

Both figures were down from the last survey, carried out in February - which showed that 68% of those executives were positive about their own businesses and 47% bullish about the overall market. The movements have come about after new cost pressures for the trade such as business rates and the cost of goods thanks to the falling pound.

Challenging times

Martin outlined the state of the market at the beginning of 2017 and said it appeared to be recovering some confidence following the drop after the Brexit result of the European Union referendum but, it now appeared to be on hold.

He added: “To put this current nervousness into perspective, at the start of 2016, 83% of senior executives were optimistic about their own business prospects for the coming year, with almost three quarters (74%) positive about their market.

“We are now living in much more challenging times.”