Costs spike for hospitality businesses as supply chain challenges intensify.

Hospitality businesses face a storm of supply chain problems and rising costs, the latest Business Confidence Survey from CGA and Fourth has revealed, and three quarters of them are likely to raise prices for consumers as a result.

The poll of industry leaders found that 99% of businesses are currently experiencing supply chain issues, with nearly nine in 10 (88%) facing reduced product lines. More than four in five have seen deliveries of products delayed (82%) or failing to turn up completely (84%).

Supply issues have been driving inflation in many key cost areas, with more than four in five seeing higher costs in their supply chain (82%). Nearly three quarters (73%) of leaders say their food costs have risen—39% of leaders state food costs have significantly increased —while nearly as many have faced increases in the costs of drinks (70%). Access to products from Europe has been a particular issue, with 68% of leaders identifying it as a major area of concern—up by 27 percentage points since the second-quarter Business Confidence Survey.

Costs are also spiking in other areas, with a similar proportion (72%) of leaders reporting increases in sundries like cleaning supplies and disposables, the survey found. Around two thirds have seen rises in the costs of sub-contracted services like builders, cleaners or entertainment (68%), and of utilities (64%).

While some business leaders hope to absorb rising costs, three in four (76%) say they will have no choice but to pass them on to consumers by increasing their prices—jeopardising sales just as trading conditions return towards pre-COVID-19 norms and consumer and business confidence mounts.

“Brexit and COVID-19 have dealt two painful blows to the food and drink supply chain, and few hospitality businesses have escaped the impacts,” said Karl Chessell, CGA’s director - hospitality operators and food, EMEA.

“Delivery problems and cost pressures have come at the worst possible time, with thousands of pubs, bars and restaurants only just finding their feet after months of lockdown. This twopronged crisis highlights the need for targeted government intervention and sustained support to protect thousands of businesses and jobs in the months ahead.”

Sebastien Sepierre, managing director – EMEA, Fourth, added: “The survey paints a very stark picture of the supply chain crisis that is severely impacting hospitality businesses right now. Many in the sector are concerned about how it will impact this year’s festive season, particularly in light of the fact last year’s Christmas trading was severely curtailed by Covid restrictions. We will be working very closely with our customers and their supply chain from a procurement, workforce and planning standpoint, to help them best prepare for and tackle these ongoing challenges in the weeks and months ahead.”

CGA is an on premise measurement, insight and research consultancy, with Fourth providing technology and services for the hospitality, leisure and retail industries.

Just Eat teams up with Gregg Wallace

Just Eat has teamed up with Gregg Wallace to help support its restaurant partners in offering healthier options as takeaways become increasingly part of everyday life.

Alongside registered nutritionist Charlotte Radcliffe, Gregg Wallace visited ten restaurants in Birmingham as part of a three-month pilot project, where they brainstormed new ideas with each owner on how they could expand their offerings.

From adding healthier items to menus to more effectively marketing the healthiest dishes to customers, the sessions covered a range of topics. As part of the project, each restaurant will now trial tailored changes to their menus to help them meet increasing demand for healthier choices.

The participating restaurants, which represent a variety of different cuisine types, have also benefited from a free trial of Nutritics, an innovative tool to calculate the nutritional value of menu items, for the duration of the pilot.

At the end of the project, Just Eat will analyse restaurant and customer feedback and develop a broader programme of support for its entire restaurant partner base across the UK. This will offer all of Just Eat’s 58,000 restaurant partners the tools, advice and incentivisation to make beneficial changes.

Gregg Wallace said: “As someone who has recently transformed my own diet, I know that takeaways can be enjoyed as part of a healthy lifestyle - but it’s not always easy to find those options. Customers need to be able to find a healthy option every time they order in. Most restaurants we visited were already actively taking steps, whether that is adding new healthier dishes or exploring where they can swap ingredients, but there’s always more that can be done.”