Adapting to Rising Prices

Rising Prices

The rising cost of living in the UK is now directly impacting spending in the hospitality sector. Though the Energy Profits Levy aims to alleviate soaring energy prices and combat the cost-of-living crisis, fears remain that the hospitality sector will continue to struggle.

Pied à Terre co-owner, David Moore, is encouraging businesses to do what they must to survive. Soaring inflation, rising prices and staff shortages have, unfortunately, become the “order of the day” for the sector and Moore stresses that businesses must adapt to these new concerns.

Moore suggests “rising prices, cutting shifts or maybe just a little shopping” as viable ways to counter new industry pressures. Moore shares that whilst current statistics place inflation at 9%, his kitchen’s budget is 47% over where it should be, whilst utilities are up around 200% compared to previous years. To counteract this, Pied à Terre have reduced their number of opening shifts to eight, compared to eleven pre-pandemic; though continued staffing shortages are forcing him consider further reductions.

Thus far, rising prices have been met favourably by Pied à Terre customers and Moore advises “if you are teetering on the edge of a price rise […] do it and charge what you have to charge.” However, this is not an option for all businesses and some are understandably hesitant to increase their prices for fear that it will further isolate customers. Last month, we spoke with NCASS members who were keen to avoid spiraling menu costs and had made small amends to make this possible.

Here are just a few ways in which they have avoided passing costs onto their customers:

  • Where possible, reduce portion sizes. Even marginal differences, say reducing 10-inch pizza, to an 8-inch pizza will ensure stock goes further, without making a huge difference to customers
  • Charge small amounts for previously concessionary items such as alternative milks or condiments etc
  • Substitute expensive items for cheaper alternatives, e.g., chicken breast for thigh or quinoa for rice
  • Operate with a reduced menu to minimise stock waste
  • Change meal ratios
  • Charge a small surplus for ‘extras’ e.g., avocado

As fears grow that Britain is heading towards a recession, Moore highlights that the hospitality industry’s potential to encourage growth played a significant role in the county’s recovery in the past. Thereby affording an element of hope that with the right support, the industry can both thrive and help the economy to survive.

“…hospitality was one of the main driving factors behind the country’s recovery from the financial crisis of the late noughties.”

We know that small, independent businesses are the hardest hit in times of economic difficulty, which is one of the reasons we’re so passionate about creating cost-saving partnerships that benefit our members. To save money on everything from food products to kitchen cleaner and card machines, simply login to your NCASS dashboard or give us a call on 0300 124 6866 and join today.

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