Food and drink prices in the hospitality sector were flat in January, with month-on-month inflation slowing to 0.02%, the latest Foodservice Price Index from NIQ and Prestige Purchasing revealed.
The deceleration followed a sharp surge in prices in December, with prices plateauing in certain categories measured in the index, including oils & fats.
While the bread & cereals category also stabilised, as did the meat & poultry segment with post-Christmas demand allowing for supply to rebalance, inflationary pressures persisted for fruits and vegetables and fish prices remained under acute pressure.
Head chef of the George at Burpham in West Sussex, Martin Bull, told The MA the pub has recently streamlined its menu, which has helped offset rising and fluctuating food prices.
“Both fish and meat have put pressure on margins as they have steadily increased, we have noticed the cost of vegetables creeping up too,” he said.
Balancing act
“We have mitigated these costs by buying and utilising lesser used cuts of meat and fish.”
Bull added the pub now focuses on slower cooked dishes, including ragu or brisket, and maximises its pie fillings where possible as well as keeping an eye on offers from suppliers for specials.
He continued: “We will continue to look at using these cuts as the year continues and even possibly cut down on these items on the menu in favour of more dairy and vegetable-based ingredients, and perhaps even hold and buy less meat, vegetables and fish and use them as more of a special rather than a fixed menu choice.”
Meanwhile, Frisco Group managing director, which operates Top 50 Gastropub the Red Lion & Sun in Highgate, North London, Heath Ball said maintaining profit and quality has been a challenge amid soaring beef prices.
“Beef prices have hurt us the most”, he told The MA. “I don’t think there is a cheap cut of beef anymore.”
“We do not want to sacrifice quality, so take a hit on the gross profit. I believe people will pay for quality, and those who don’t want to pay the price will choose something else on the menu.”
Ball explained preserving quality and maintaining margins has become a “dangerous balancing act”, making it hard to plan and forecast.
Biggest cost
Number one on the Top 50 Gastropubs List, the Unruly Pig in Suffolk, has faced similar challenges.
Chef patron Dave Wall told The MA increases to vegetable prices in particular had become more noticeable over the past year.
“What were once staple items now need to be considered very carefully for their return on investment”, he said.
Wall added customers also have less discretionary spend due to the cost-of-living prices, making it difficult to put prices up.
However, the chef patron warned increasing operating costs, including national insurance, business rates and minimum wage, had a bigger impact than rising food costs.
Wall continued: “Pubs and restaurants just have no wiggle room or slack left to continue absorbing the increases to our running costs.
“We have reduced our menu size and made greater overlap of dishes between our tasting, a la carte and lunch menus to decrease waste and increase labour efficiency so that we can still try and achieve the same standards with less labour, our biggest cost.”
