Flexible menus, consolidation of orders pitched as Ukraine crisis remains ‘long-term threat’ to prices
Operators are also told to keep speaking to suppliers about availability.
The Russian invasion of Ukraine is likely to end hopes that spiralling food inflation is “just a blip”, buying specialist Lynx Purchasing warned, advising chains to plan for the impact of the invasion, and the measures to oppose it, on their businesses.
"There is now further pressure on hospitality and catering operators, who were already seeing unprecedented levels of food and drink inflation, driven by a combination of spikes in commodity prices, increased transportation and import costs, and higher labour costs,” managing director Rachel Dobson said.
"All of this has to be factored into the prices suppliers charge to customers. The latest inflation figures from the ONS [Office for National Statistics] show that restaurant prices were up 6.4% year-on-year in February."
Examples cited of the impact of the Ukraine crisis on the hospitality sector include prices on poultry, citing loss of grain from both Ukraine and Russia; vegetable oil, as Ukraine supplies 60% of the world’s sunflower oil; fuel, which suppliers will factor into increased prices charged to operators; and utilities, where gas and electricity suppliers “are currently only likely to offer new fixed price contracts at very high rates.”
"While we all hope that the immediate crisis can be resolved quickly, the impact of both the war itself, and sanctions, mean that operators will now have to budget for high prices for some time to come; at the very least for the rest of this year,” Dobson added.
"The best advice to operators is to plan for costs that can't be controlled, and focus on those that can - one of which is purchasing. Best practice includes planning menus well in advance, and consolidating orders to meet free delivery and minimum value thresholds. Our advice is to order early, keep speaking to suppliers about availability, and to keep menu descriptions flexible to allow for changes if needed.”
