The gross profit of hospitality operators has fallen by four percentage points in the 12 months to May 2022, to 74%, as cost pressures bite, according to a new report from software provider Fourth.
Its survey of more than 1,000 pubs, bars and restaurants found that average overall costs are up by 10% compared to 2019, with food costs up by approximately 13% and drink costs by 8% over the same period.
The commodities which have seen the largest increases are dairy – with costs up by 40%, grains (+35%), meat (+35%), fish (+25%) and fruit and veg (+20%).
Commenting on the report, Kate Nicholls, chief executive, UKHospitality said: “These stark figures highlight the extent of the damage that rising costs are having on the hospitality and leisure market, engulfing and suffocating businesses and consumers alike.
“After more than two years of unprecedented challenges due to Covid, cost inflation now poses a massive threat to our industry and the wider economy. The impacts of rising costs are being felt across every facet of running a hospitality business, including on jobs and recruitment, economic stability, business viability, consumer confidence and willingness to spend.”
Sebastien Sepierre, managing director – EMEA, Fourth, said: “After enduring the shock of enforced closures, followed by the stop-start nature of trading during the pandemic, the hospitality industry now has another major challenge to confront in the form of supply chain disruption. The complexities are such that most operators have never seen anything like this before.
“The supply chain crisis is one of the most pressing concerns within the sector and it is imperative that operators have the tools at hand to understand and address the challenge of overcoming the disruption.”
