The price of a meal out could rocket this autumn as hospitality chiefs have warned of a cocktail of cost pressures on businesses.
Speaking to the Business, Energy and Industrial Strategy committee on Tuesday, Food and Drink Federation boss Ian Wright urged MPs to “think seriously about inflation in hospitality.”
Price inflation for hospitality’s operational costs was between 14 to 18 per cent at the moment, he said, citing figures from UKHospitality. “That is terrifying,” Wright said.
“Inflation is a bigger scourge than anything else because it discriminates against the poor,” Wright said.
Restaurants are facing a “contest” with retail and e-commerce giants for staff while an exodus of overseas workers last year has seen venues scrabbling for new recruits.
Venues are seeing hiked costs for essential goods, as well as increasing wages to attract staff.
Wage inflation was occurring alongside a “real constriction of choice,” Wright also told MPs.
“Anyone who has been to a restaurant particularly in tourist areas in the last three or four months will have noticed that the amount of choice has been restricted. You have five items on most menus rather than 10.”
Many venues are facing debts that accrued in the pandemic while also recently seeing VAT increase to 12.5 per cent, as government Covid support winds down.
UKHospitality CEO, Kate Nicholls, said it was “inevitable” that businesses would be forced to pass on some of the pressure to customers through higher prices.
“Hospitality is seeing material cost inflation, with many companies reporting a heady cocktail of substantial increases in the cost of essential goods and services they depend on to run their businesses”, she said.
The price of a pint was estimated to rise 30p even ahead of any duty increases at the Budget, a survey by The Morning Advertiser found.
More than eight in ten pubs have raised or plan to raise prices because of rising costs.
Emma McClarkin, chief executive of the British Beer & Pub Association, said a variety of rising prices came at “a critical time” in the Covid recovery.
“It is one of the reasons we are urging the Chancellor to support our sector by cutting beer duty, VAT and business rates in the Budget next week to ensure our pubs and brewers can remain at the heart of communities up and down the country,” she added.