The warning comes as Lynx Purchasing publishes the Winter 2024 edition of its regular Market Forecast, using 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 across the start of 2025.
Rachel Dobson, managing director of Lynx Purchasing, said: “The pattern of Christmas trading is now clear for almost all operators. Menus are in place and bookings confirmed. The challenge now is estimating the level of consumer demand in the first few months of 2025, and planning accordingly.
“Our advice is to buckle up for a bumpy ride in the new year. We know the Budget has heaped extra costs on the sector in terms of higher wage and national insurance costs. While inflation is down overall, the supply chain remains fragile. There are still many staple products where price increases are running well ahead of the official inflation rate.”
Product areas flagged up by the Market Forecast include:
- Beef: Lower cattle numbers and higher production costs have continued to drive up beef prices.
- Lamb: UK lamb prices have risen sharply this year, due to the impact on production of bad weather as well as higher global demand.
- Potatoes: The impact of flooding in the UK and Europe at the start of 2024 has continued to keep potato pieces high, with record levels recorded at the end of the summer.
- Salads: The disastrous floods in Spain at the end of October have caused ‘significant damage’ to both crops and production capacity.
Dobson added: “The new year is always quiet for the hospitality sector, and the first three months of 2025 will undoubtedly be make or break for many businesses if consumer confidence doesn’t keep up with higher operating costs. It’s also the time of year when the weather can be at its most unpredictable – we’re still feeling the impact of the flooding in January 2024, which hit many farms badly.
“With Easter falling in late April in 2025, operators will need to make the most of opportunities in the first quarter such as Valentine’s Day and Mother’s Day. Working with suppliers to offer produce when it’s at its best in terms of quality, value and availability is one way to mitigate any consumer reluctance to spend.”
A free copy of the Winter 2024 Lynx Purchasing Market Forecast can be downloaded from the website at www.lynxpurchasing.co.uk.