Interest rate rise to battle increasing food prices

By Rebecca Weller

- Last updated on GMT

Action set to be taken: inflation hikes means further costs to pubs (Credit: Getty/ Ibrahim Akcengiz)
Action set to be taken: inflation hikes means further costs to pubs (Credit: Getty/ Ibrahim Akcengiz)

Related tags: Legislation, Finance, Food

The Bank of England is today (Thursday 5 May) expected to announce the biggest increase to its base interest rate in 13 years, from 0.75% to 1%, in a bid to tackle inflation amid soaring food prices, according to a report by Sky News.

Licensee of the Dog at Wingham, Canterbury, Marc Bridgen explained the pub has seen the cost of tomatoes increase by 100% while chicken has gone up by 15% and beef 50% on top of the pubs oil costs having increased from £27 to £42.50 for a 25-litre drum.

Bridgen said: “[Food prices] are a major issue and a huge concern going forward.

“Every cost we have is going up significantly and then you add to that the 1st of April VAT increase on food and accommodation. My gut is telling me there is little to no margin in what we do at the moment and it doesn't look like it's going to get any easier.”

Fruit and veg prices up

Furthermore, the cost of seasonal fruit and veg prices has increased by 37% compared to the same period in 2020, according to data from the Government’s Department for Environment, Food & Rural Affairs (DEFRA).

However, rising food costs are just “one part of the jigsaw” according to Bridgen as cost increase across the board have created a “bleak” outlook for the industry.

He said: “[The] cost of food is just one part of the jigsaw. I try to be positive, but right now it is quite bleak for hospitality.

“It's not just the cost of the food prices going up, we've seen our wet going up [as well].

“Our wage bill has gone up [around] 10% because the national minimum wage has gone up, but the whole team deserve [it], they need it because their cost of living is going through the roof.

“I can barely bring myself to start renegotiating my gas and electric, our contract runs out [soon] so our prices are going up from May to June.”

Creative serves

Food supply has also become an issue and the pub has had to become “creative” by serving smaller portions to avoid any food wastage as well as increasing prices for some dishes and serving a smaller menu at lunchtimes with footfall and revenue both down amid inflation reaching a 30-year-high of 7% in March.

Bridgen added: “We’re moving into summer so we’ve [added] fish and chips on to the menu, but it's not cod, it's whatever whitefish we can get every day at the best value to keep it as an affordable dish.

“It's a combination of having to pass some of these costs on to the to the guest, but also trying to be more creative in the products and the proteins we source to try and keep the menu prices down.

“Everyone is struggling with the cost-of-living crisis and we're trying our best not to ramp up the menu prices.”

Related topics: Legislation

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