London: Operators in the hospitality industry are advised to modify purchasing strategies as food and drink costs soar. The Spring 2025 Market Forecast from Lynx Purchasing highlights significant price increases in essential products like beef, potatoes, and hot drinks, urging operators to reassess their supply chain practices.
Operators in the hospitality sector are being cautioned to adapt their purchasing strategies as they confront rising food and drink costs, according to Lynx Purchasing. The hospitality specialist has issued this warning alongside the publication of its Spring 2025 Market Forecast, which assimilates insights from a variety of suppliers partnered with Lynx, as well as official inflation data, to analyse pricing trends for food and drink during the spring trading period.
Rachel Dobson, managing director of Lynx Purchasing, stated, “This isn’t a market in which operators can afford to be complacent about any aspects of their purchasing costs.” She highlighted that food inflation surged globally by approximately 6% in 2024, surpassing the overall UK inflation rate, thus affecting hospitality through subsequent price hikes on a diverse array of fresh, frozen, and pre-made food products.
Recently reported price increases have been particularly notable in the domain of hot drinks and juices, pivotal components for sales and profitability within the sector. These surges are further complicating the financial landscape for operators, creating what Dobson describes as a “double whammy” due to the combined effect of heightened food costs and the pressure on profit margins.
The Market Forecast outlines several key areas of concern, particularly in terms of product pricing:
- Beef: There have been significant price increases for hospitality suppliers, particularly for premium cuts, with expectations of further hikes to come.
- Potatoes: Prices have escalated beyond the general inflation rate, showing a year-on-year increase of 16.8% for unprocessed potatoes as of December.
- Salads: Producers have indicated that higher prices and availability delays could persist unless the UK Government intervenes to streamline processes.
- Hot Drinks: The market has seen record prices for coffee and cocoa in recent months, driven by global commodities fluctuations.
- Orange Juice: Brazil, the predominant exporter of orange concentrate, has reported a 20% reduction in exports year-on-year during the latter half of 2024, impacting pricing.
In light of these challenges, Dobson underscored the necessity for operators to “spring clean” their purchasing processes. She stressed that benchmarking suppliers against competitors based on price and quality is crucial, advising that while maintaining strong supplier relationships is important, they should arise from sound business principles rather than misplaced loyalty.
Despite the overall grim outlook on rising costs, Dobson pointed out potential opportunities for hospitality operators to capitalise on seasonal events such as Mother’s Day and Easter, suggesting there remains a market for customer treats. For further insights and detailed analysis, a free copy of the Spring 2025 Lynx Purchasing Market Forecast is available for download via their website.
Source: Noah Wire Services
