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Rising food inflation to pose a challenge for restaurants

16 | 04 | 13

Food inflation could double in 2013, according to accountancy firm Wellers.

This means restaurant owners and food service operators will have to manage their food procurement and usage carefully.

The hospitality sector has been facing rising food costs of between five and six per cent annually for several years, but this increase could now be set to grow at an even faster rate.

One of the primary causes of this is the damage to world harvests that occurred as a result of unusual or unexpected variations in the climate over the past 12 months.

The National Restaurant Association in the US has reported that commodity prices will ‘remain elevated’ in 2013 and Wellers believes this will also affect UK operators, particularly due to the weak pound.

US commodity prices rose by 8.1 per cent in 2011, which was the strongest increase in three decades, and by a further two per cent in 2012. A similar pattern could now hit the UK.

This will be of interest to catering equipment suppliers who are likely to be affected by any developments in the eating out market.

To overcome this challenge, the industry must be flexible, aware of food margins and innovative, according to Bob Cotton, hospitality advisor to Wellers.

"Using cheaper cuts of meat and other ingredients in new dishes can enable prices to be maintained with the necessary profit margin, buying in prepared menu items might also be an option," he stated.

Mr Cotton also suggested that cutting down on portion sizes would be beneficial for protecting profit margins, reducing food waste and improving people's health.

“At a time when the government continually stresses the dangers of obesity and the catering industry’s responsibilities towards it, restaurants could consider the role that portion sizes can play in reducing obesity levels," he said.

Mr Cotton concluded by claiming that many companies will be faced with a choice between increasing their prices or reducing portion sizes and "the wise restaurateur will need to keep a close eye on both alternatives".ADNFCR-16001031-ID-801572302-ADNFCR

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