Hospitality food costs up 40% due to supply chain disruptions

The rising prices impact hospitality operators’ profits and bills.

Amidst the continued supply chain woes, the cost of hospitality food increased by 40%, which hit the hospitality operator’s bills and profits, according to the Fourth’s latest data.

Data collected from 1,000 pubs, bars and restaurants in the UK showed that hardest hit are dairy (costs up by 40%), grains (+35%), meat (+35%), fish (+25%), and fruit and vegetables (+20%).

Moreover, average overall costs are up 10% compared to pre-pandemic levels.

Food costs increased by over 13%, whilst drink costs are up by 8% over the same period. In the 12 months to May 2022, average gross profit went down from 78% to 74%.

The Fourth tagged factors behind the supply chain crisis are the surge in utility and fuel prices, and the UK inflation at its highest since the 1980s, labour shortages.

This led to operators evaluating supply chains models, with many combatting the issues by turning to technology, streamlining their supplier base, and adapting recipes on their menus.

Kate Nicholls, Chief Executive of UKHospitality, said: “These stark figures highlight the extent of the damage that rising costs are having on the hospitality and leisure market, engulfing and suffocating businesses and consumers alike.