Operators facing the challenge of higher food and drink costs need to benchmark their purchasing and be ready to shake up bad habits this spring, warns hospitality specialist Lynx Purchasing.
Rachel Dobson, managing director of Lynx Purchasing says: “This isn’t a market in which operators can afford to be complacent about any aspects of their purchasing costs. Food inflation rose globally by about 6% in 2024, ahead of the overall UK rate, and that filters through into hospitality via price increases for a range of fresh, frozen and pre-made food products.
“At the same time, the cost of hot drinks and juices have seen sharp rises over recent months, and they are important drivers of sales and profits for hospitality. That puts further pressure on operators’ margins, and alongside continued high food costs represents a ‘double whammy’ of increased buying costs, at a time when there are already serious challenges in a range of fronts.
“That makes it imperative that operators ‘spring clean’ their entire buying process. Crucially they need to benchmark their suppliers against the competition in key areas such as price and quality. Strong supplier relationships are essential, but they should always be based on sound business principles, never misguided loyalty.”  Â
The warning comes as Lynx Purchasing publishes the Spring 2025 edition of its regular Market Forecast, using insight supplied by the range of suppliers that Lynx works with, as well as official inflation data, to look at food and drink pricing across the spring trading period.
Product areas flagged up the Market Forecast include:
- Beef:Â Beef prices continue to rise sharply, with strong demand from the retail sector, as well as export markets. Hospitality supplier have raised beef prices, especially for premium cuts, and expect further increases. Suppliers can advise on the availability of alternative cuts, but the time required to raise cattle means operators should budget for higher beef prices for some time to come.
- Potatoes:Â Prices have continued to rise well ahead of the inflation rate, with the year-on-year price of unprocessed potatoes up 16.8% in December. With producers still recovering from the impact of flooding in early 2024, the effect of the freezing weather and floods in January this year is being assessed.Â
- Salads:Â The British salad industry has warned that post-Brexit checks on seed and plant imports will have a serious impact on this year’s crops, particularly tomatoes, peppers and cucumbers. Higher prices and delays in availability are likely unless the UK government streamlines the process, producers have warned.
- Hot drinks:Â Coffee and cocoa prices have been at record prices on global commodities markets over recent months, which will keep hospitality prices high for the foreseeable future. As Easter approaches, operators should also budget for higher costs for chocolate desserts.Â
- Orange Juice:Â Supplies are short due to the impact of climate change. Brazil, the largest producer, exported 20% less concentrate year-on-year in the second half of 2024, which has had an impact on price.
Dobson adds: “With operators feeling the impact of higher wage costs resulting from the NI increase announced in the Budget, along with low levels of consumer spending, a purchasing “spring clean” is one way to help manage the bottom line. From ordering and menu planning right through to contract renewals, there are always opportunities for ways
“There are also a few opportunities early in the year for occasions when customers are looking to treat themselves, such as Mother’s Day and Easter. Use specials boards to persuade customers to push the boat out, and speak to suppliers about changing availability – not only what’s in season but also what’s going out of season and may be good value.”
A free copy of the Spring 2025 Lynx Purchasing Market Forecast can be downloaded from the website at www.lynxpurchasing.co.uk. A free guide, The Seven Habits of Highly Effective Purchasing Teams, is also available on the site.
