Food inflation ‘here to stay' say caterers

19 June 2008 by
Food inflation ‘here to stay' say caterers

Contract caterers believe higher food prices are here to stay, a Caterer investigation has shown.

Caterer spoke to chief executives and managing directors at the UK's leading contract caterers about how food inflation was affecting their businesses. All agreed that higher prices for food were now a fact of life, with almost all expecting increases to continue in the short to medium term.

Food inflation had been experienced across the board by the majority of respondents, with wheat-based products the most heavily affected single category. Price rises for dairy products, eggs, fish, red meat, poultry, fruit and vegetables, and rice were also reported.

Most caterers had already taken action to curb the effects by negotiating better deals with suppliers, revising menus to use less expensive ingredients and, initially, absorbing costs themselves.

However, with no sign that food inflation will end soon, the majority had either passed increased costs on to clients or customers through price rises or renegotiated contract terms.

Food service consultant Chris Stern said that while clients were generally taking a realistic view on the subject and accepting that food inflation was something out of caterers' control, operators still needed to be proactive.

"I wouldn't recommend increasing your tariffs by the same amount as food price] inflation, 6-8%, as you should be able to find cost savings," he said, pointing to techniques such as intelligent menu planning and tighter cost control.

Food price inflation - what they said

"Food prices have become a fairly significant and worrying factor. As we focus on seasonal ingredients, locally sourced, it's been easier for us to change our menus and minimise the impact to the business."
Patrick Harbour, director, Harbour & Jones

"Inflationary pressure is unprecedented, but our ability to manage it has never been better."
Ian El-Mokadem, chief executive, Compass UK & Ireland

"We've had conversations with our clients to drive home the fact that the situation won't change. It's better to tackle the issue now and raise prices while it's in the customers' minds, rather than in a year's time when it's forgotten."
Wendy Bartlett, director, Bartlett Mitchell

"We're doing our best to minimise the impact without reducing quality. For example, the price of Iceberg lettuce has gone through the roof this week, so we're looking at substituting Cos."
Gareth Harrison, director of group business, Harrison Catering Services


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By Chris Druce and Catherine Belton

E-mail your comments to Chris Druce here.

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