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Businesses told to act now to tackle inflation impact

03 January 2017 by
Businesses told to act now to tackle inflation impact

Operators need to take urgent action against the rising impact of food and drink inflation on their businesses, buying specialist company Lynx Purchasing has warned.

The company predicts that restaurants, pubs and hotels will receive a shock this month when receiving supplier invoices for products bought in December 2016.

Over the course of that month, many operators had set menus in place taking them from Christmas to New Year which meant that they would have had no choice but to buy the products dictated by the menu, with some possibly not looking too closely at the prices.

Rachel Dobson, managing director of Lynx Purchasing, said: "Businesses may now find that much of the profit margin they were forecasting from December sales has been eroded by lower GPs. That will be a sobering thought for many as they face the prospect of the quiet trading months of January and February and the expectation that food and drink inflation will continue to rise steadily throughout 2017.

Lynx Purchasing has worked with suppliers, such as Peach Pubs, the operator of 18 food-led pubs in the UK, to limit price increases on January menus.

Peach Pubs founder Hamish Stoddart said: "While our wholesalers have imposed price rises in some areas of the menu, it hasn't been on the most important lines for Peach. This, along with Lynx's expert negotiation, has got the increase down to something approaching OK, and in almost all areas of the menu, there won't be any more increases until later in the year. I'm not celebrating, but I do believe it gives us a reasonable base for the first half of 2017.

"However, our suppliers are still under immense pressure and some of them will be losing money, so I expect more challenges later this year."

Dobson added: "The chefs at Peach have buying lists and know which suppliers they have to order from across every area of the menu. That level of discipline is going to be essential for operators during 2017 and beyond.

"It is now more essential than ever for operators to plan their menus effectively, price their dishes profitably, and work closely with suppliers to maintain purchasing discipline. Those who fail to act now could well find themselves struggling very soon."

Lynx Purchasing works with over 2,000 hospitality and catering operators, matching them with suppliers which offer the best possible prices.

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