Upheaval in the supply chain caused by ongoing conflicts in Ukraine and the Middle East, as well as the impact of storms and freezing weather in the UK, threaten to reverse the benefits of the falling inflation rate, warns hospitality buying specialist Lynx Purchasing.
As operators plan for the busy Easter weekend at the end of March, as well as occasions such as Mother’s Day, Lynx Purchasing managing director Rachel Dobson warns: “The easing of inflationary pressures on the hospitality sector is very welcome. The price increases of the past two years are now bedded in, and operators can start to plan their menus for spring and summer accordingly.
“However, the supply chain is still very sensitive to shocks, The ongoing crisis in Ukraine is still having a significant impact on cooking oil and grain prices, while disruption to shipping through the Suez Canal is affecting the cost of a wide range of commodities. Suppliers of bulkier items such as catering equipment, are already advising customers to factor in delays.
“Blockades and protests by European farmers also have the potential to affect supplies into the UK, and even closer to home, the first few weeks of 2024 saw a series of storms hit the UK, as well as sub-zero temperatures. Farmers and growers are still assessing the resulting damage to crops, which may not be fully apparent for several months.”
The warning comes as Lynx Purchasing publishes the Spring 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 in the run-up to the spring trading period.
Specific product areas highlighted in the latest Market Forecast include:
- Meat: Demand for beef from both retail and hospitality is keeping cattle prices high, with significant demand for premium cuts such as steaks and roasting joints from top-end r There has been strong demand for lamb shanks across the winter, and as spring approaches, roasting joints will see an increase in orders, particularly in the run-up to the Easter weekend. Lamb prices are generally high due to strong global demand, making it a premium menu item.
- Fish: Due to changes in the sustainability ratings of many species, operators should be working closely with suppliers to plan spring menus. Farmed fish may be the best value and most sustainable option for some species. Frozen fish and processed fish products will be affected by higher shipping costs due to the Middle East conflict.
- Fresh veg: The very wet weather and flooding experienced in many parts of the UK over the winter, followed by freezing temperatures, have affected a range of crops in terms of both yield and the costs of harvesting. This will have an impact on fresh veg availability for some months to come, with produce such as carrots, onions and the spring crop of new potatoes likely to be affected.
- Salad: The extreme hot weather in much of Europe last summer and autumn severely affected salad crops, with many growers and suppliers still playing catch up. Prices are likely to remain fairly high until UK salad crops start to become more widely available in late spring.
- Cooking oil: The ongoing conflict in Ukraine and the Russian invaders is expected to keep sunflower oil prices high, while the olive crop was impacted by the hot weather in Europe last year.
- Wine: The extreme hot weather in Europe last summer also caused problems for the grape harvest, with a knock-on effect on wine prices. New World wines have better availability, but are likely to be affected by higher shipping costs.
Dobson added: “The first couple of months of the year are always tough for most operators, and doubly so this year with consumer confidence very fragile. Operators are looking to the Easter Weekend, as well as Mothers’ Day, to encourage customers back into the eating out ‘habit’.
“Any sudden increase in prices, or shortage of produce will very easily deter some consumers, at a crucial time for the hospitality sector. The best advice to operators is to hope for the best, but plan for the unexpected. Place orders in good time, keep speaking to suppliers about availability, and to keep menu descriptions flexible to allow for changes if needed.”
A FREE copy of the Spring 2024 Lynx Purchasing Market Forecast can be downloaded from the website at www.lynxpurchasing.co.uk.
