The warning comes as Lynx Purchasing publishes the Spring 2025 edition of its regular Market Forecast using insight from the range of suppliers that Lynx works with, as well as official inflation data, to look at food and drink pricing across the spring trading period.
Rachel Dobson, managing director of Lynx Purchasing, commented: “This isn’t a market in which operators can afford to be complacent about any aspects of their purchasing costs. Food inflation rose globally by about 6% in 2024, ahead of the overall UK rate, and that filters through into hospitality via price increases for a range of fresh, frozen and pre-made food products.
“The cost of hot drinks and juices have seen sharp rises over recent months, and they are important drivers of sales and profits for hospitality. That puts further pressure on operators’ margins, and alongside continued high food costs represents a ‘double whammy’ of increased buying costs, at a time when there are already serious challenges in a range of fronts.
“That makes it imperative that operators ‘spring clean’ their entire buying process. Crucially they need to benchmark their suppliers against the competition in key areas such as price and quality. Strong supplier relationships are essential, but they should always be based on sound business principles, never misguided loyalty.”
Product areas flagged up the Market Forecast include:
- Beef: Hospitality suppliers have raised beef prices, especially for premium cuts and expect further increases.
- Potatoes: Prices have continued to rise well ahead of the inflation rate, with the year-on-year price of unprocessed potatoes up 16.8% in December.
- Salads: Higher prices and delays in availability are likely unless the UK Government streamlines the process, producers have warned.
- Hot drinks: Coffee and cocoa prices have been at record prices on global commodities markets over recent months.
- Orange juice: Brazil, the largest producer, exported 20% less concentrate year-on-year in the second half of 2024, which has had an impact on price.
Dobson highlighted there are also a few opportunities where customers are looking to treat themselves such as Mother’s Day and Easter. A free copy of the Spring 2025 Lynx Purchasing Market Forecast can be downloaded from the website at: www.lynxpurchasing.co.uk