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Operators take hit on margins as meat prices soar

10 August 2012
Operators take hit on margins as meat prices soar

Caterers will continue to see higher costs for menu staples such as burgers and sausages, despite falling inflation, buying specialist Lynx Purchasing has warned. But the company has also urged hospitality businesses to lock in price deals with utility suppliers while inflation remains low.

The advice comes out of Lynx Purchasing's Market Forecast, which is based on inflation figures from the May UK Retail Price Index (RPI). RPI stood at 3.1% in May 2012, down from 3.5% in April, and the lowest since December 2009.

John Pinder, Lynx Purchasing managing director, said: "The utilities market is always volatile, as political and economic factors can change the outlook quickly, but currently we are getting some very good deals for customers willing to commit to multi-year utility contracts."

But he added: "Behind the headline inflation figures, there are key products such as meat which are still seeing sharp price increases. Along with prime cuts, the cost of beef and pork trim used for products such as sausages, burgers and pies are going up steadily. When the key suppliers publish their autumn price lists, many operators will face the stark choice of raising prices or taking a hit on margins."

LYNX'S PREDICTIONS FOR MEAT AND FISH PRICES

BEEF Prices across all key cuts, including rump, sirloin, rib-eye and fillet, are expected to rise 10% to 15%.

LAMB New season prices started strongly at the end of May, continued to rise in June, and are expected to have done so in July, although they should ease off after that. Traditionally the best time of year to buy UK lamb is September as the prices have eased slightly but the quality remains excellent.

PORK Demand increased during summer, especially for rib and belly, as a result of demand for barbecues. Loins are also expected to go up, but legs remain stable. The price of shoulder, used in sausages, is firming up thanks to its status as a barbecue staple, and trading down to sausages by some consumers.

GAMMON Prices are expected to remain unchanged through July and August.

POULTRY Prices are expected to remain flat after increases for breast meat in April and May. But the instability of the euro can always cause price fluctuations as the majority of poultry sold in the UK is produced in Europe.

FISH The market is now sourcing less expensive fish such as Dover sole, turbot and halibut. European uncertainty is having some effect on prices.

Salmon Volumes are stable and prices will level out. â- Tuna Prices are rising as we enter tropical monsoon season.

â- Sea bass Prices are rising due to the financial constraints in Greece. Fish have not grown as well as usual due to a colder winter leading to a shortage of larger fish.

â- Lemon sole Inshore season has started, which will offer more consistent pricing and availability.

â- Plaice At its tastiest during July and August before spawning in autumn.

â- Cold water prawns Norwegian and Icelandic prawns could increase by 5% and Canadian prawns by 15%.

â- Scampi Fishing conditions remain poor so there is limited availability and prices are at historic highs.

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