Hospitality and catering businesses need to be ready to weather a challenging winter as higher operating costs and volatile food pricing have an impact, warns hospitality buying specialist Lynx Purchasing.
“The pattern of Christmas trading is now clear for almost all operators,” says Rachel Dobson, managing director of Lynx Purchasing. “Menus are in place and bookings confirmed. The challenge now is estimating the level of consumer demand in the first few months of 2025, and planning accordingly.
“Our advice is to buckle up for a bumpy ride in the new year. We know the Budget has heaped extra costs on the sector in terms of higher wage and National Insurance costs. At the same time, while inflation is down overall, the supply chain remains fragile. There are still many staple products where price increases are running well ahead of the official inflation rate.”
The warning comes as Lynx Purchasing publishes the Winter 2024 edition of its regular Market Forecast, using exclusive insight supplied by the range of suppliers that Lynx Purchasing works with, as well as official inflation data, to look at food and drink pricing across the start of 2025.
Product areas flagged up the Market Forecast include:
- Beef: Lower cattle numbers and higher production costs have continued to drive up beef prices. With strong demand for the available supplies from both retail and hospitality, prices are likely to remain at high levels across the winter.
- Lamb: UK lamb prices have risen sharply this year, due to the impact on production of bad weather, as well as higher global demand. Spring lamb will start to become available in the new year, but operators planning Mother’s Day and Easter menu should expect prices to remain strong,
- Potatoes: The impact of flooding in the UK and Europe at the start of 2024 has continued to keep potato pieces high, with record levels recorded at the end of the summer. Operators using frozen products such as chips and roast potatoes should budget for higher costs at least through to the 2025 harvest.
- Salads: Spain produces significant quantities of salad and vegetables imported into the UK, and the disastrous floods at the end of October have caused significant damage to both crops and production capacity, Suppliers will look for alternative sources, but some shortages and higher prices are very likely.
Dobson adds: “The new year is always quiet for the hospitality sector, and the first three months of 2025 will undoubtedly be make or break for many businesses if consumer confidence doesn’t keep up with higher operating costs. It’s also the time of year when the weather can be at its most unpredictable – we’re still feeling the impact of the flooding in January 2024, which hit many farms badly.
“With Easter falling in late April in 2025, operators will need to make the most of opportunities in the first quarter such as Valentine’s Day and Mother’s Day. Working with suppliers to offer produce when it’s at its best in terms of quality, value and availability is one way to mitigate any consumer reluctance to spend.”
A FREE copy of the Winter 2024 Lynx Purchasing Market Forecast can be downloaded from the website at www.lynxpurchasing.co.uk