Operators need to take action to tackle the impact of food and drink inflation on their business, warns buying specialist Lynx Purchasing. The Lynx team will be at Pub 17 on 7 and 8 February to advise operators on ways to manage costs.
The new year has seen a wake-up call delivered to many pubs and bars in the form of supplier invoices for products bought during the key trading month of December, while impending price rises for many fresh produce prices as a result of bad weather in Europe have added to the challenges facing the sector.
Rachel Dobson, managing director of Lynx Purchasing, says, “Many found that much of the profit margin they were forecasting from the December sales period were eroded by lower GPs.
“That is already a sobering thought for many operators as they face the prospect of the quiet trading months at the start of the year, and the steadily increasing food and drink inflation forecast throughout 2017 is also now starting to come through.
“For example, dairy, and especially butter, has seen sharp price rises. Products imported from Europe were already costing more as a consequence of the fall in the value of sterling, and that will be compounded by the effect of bad weather on many salad lines and leafy vegetables grown in Europe.
“We’ve been able to negotiate on behalf of our customers to mitigate the impact, but many operators without access to specialist purchasing support will have seen significant increases in their buying costs, with more to come.”
For Peach Pubs, operator of 18 acclaimed food-led pubs, Lynx Purchasing has worked with suppliers to limit price increases on new menus introduced in January. Founder Hamish Stoddart said: “Rachel has worked really hard on our behalf, so while our wholesalers have imposed price rises in some areas of the menu, it hasn’t been on the most important lines for Peach.
“This, along with Lynx’s expert negotiation, has got the increase down to something approaching OK, and in almost all areas of the menu, there won’t be any more increases until later in the year. I’m not celebrating, but I do believe it gives us a reasonable base for the first half of 2017.
“However, our suppliers are still under immense pressure and some of them will be losing money, so I expect more challenges later this year.”
Dobson adds: “We have a long-standing partnership with Peach. Their chefs have buying lists and know which suppliers they have to order from across every area of the menu. That level of discipline is going to be essential for operators during 2017 and beyond.
“No business will be immune to the effects of inflation, but our priorities are to negotiate the best possible prices with suppliers for our customers; to put pricing agreements in place which allow operators to plan menus with confidence; and to continue to share our insight into pricing and market trends.
“It is now more essential than ever for operators to plan their menus effectively, price their dishes profitably, and work closely with suppliers to maintain purchasing discipline. Those who fail to act now could well find themselves struggling very soon.”
Lynx Purchasing works with more than 2,200 hospitality and catering operators to match them with the best suppliers and get the best possible prices on food and drink, as well as a whole range of essential products and services. Lynx’s buying experts help operators buy better and save time and money, year after year.
Lynx Purchasing are on Stand 94 at Pub 17. For more information on Lynx Purchasing, visit www.lynxpurchasing.co.uk email savings@lynxpurchasing.co.uk or call 01325 377 845.
