Inflation unexpectedly rose to 10.4% in February according to figures released by the ONS yesterday (22 March), prompting operators and trade bodies to push for further support from the government for the hospitality sector.

Consumer price inflation fell for three consecutive months to a 10.1% rise in the year to January, from its 11.1% peak in October. Food and non-alcoholic beverages, energy costs, and rising prices in the hospitality sector were the largest contributors to the rise in February, despite economists forecasting a drop to 9.9%.

Food and non-alcoholic drink prices rose by 18.2% in the year to February, up from 16.8% in January, while at restaurants and cafes, prices rose by 11.4% in the year to February - up from 9.4% in January.

In response, Loungers chairman Alex Reilley tweeted: “Energy producers are holding this country to ransom and until this government grow a set and take them to task, inflation will continue to remain sky high.”

Kate Vacovec, CFO, Pizza Hut UK & Europe said: “Today’s ONS figures are a stark reminder of why the hospitality sector needs further support as food prices rise to the highest levels in the last four decades.

As a global brand, Pizza Hut has been working to support its franchisees, employees, and people – but further Government support is greatly needed.

Last week, the Chancellor fell short of delivering the support our sector needs to weather the storm. We hope that from today’s figures, our Government can recognise why hospitality businesses need additional relief so they can better balance the multiple businesses costs they’re facing and continue delivering growth to our economy and value to customers. It is only with their support that UK hospitality can once and for all get back to its feet.”

UKHospitality said the government needs to address the cost of doing business in the sector, from holding energy suppliers accountable to enforcing the renegotiation of energy contracts.

UKHospitality CEO Kate Nicholls commented: “The ONS stats released this morning show a clear correlation between the unexpected rise in inflation and inflated prices in the hospitality sector, where food and drink costs for businesses have risen by 24%. This, along with soaring energy costs, has resulted in prices for customers rising more than 12% – the highest in 30 years.

“If the Government is serious about bringing inflation under control quickly then it therefore needs to address this cost of doing business in the sector, particularly as this is only set to get worse this April when support with soaring energy costs falls away. At this point, contracted prices are due to rise a further 82% on average, which will force operators to raise prices for consumers again, further driving inflation.

“The solution is clear: urgent action on the market failures identified by OFGEM last week to force suppliers to the table, to enforce the renegotiation of contracts signed between July and December 2022, penalty-free, and to enact full regulation of the non-domestic energy market, if suppliers are not willing to act.”

The Night Time Industries Association (NTIA) and the British Beer & Pub Association (BBPA) said the unexpected figures were a blow for hospitality businesses that are expecting further rises in energy prices for 1 April.

NTIA CEO Michael Kill said: “The Office of National Statistics released figures this morning showing inflation unexpectedly rising for the first time in 3 months, from 10.1% last month to 10.4% over the 12 months to February, with no sign of the cost inflation crisis easing.

“Following a spring budget, which did nothing to stabilise the concerns of businesses across the night time economy, with many still suffering heavily with untenable operating costs, leaving them uncertain about the future.”

Emma McClarkin, CEO, BBPA, commented: “Today’s unexpected rise in inflation is bad news for our pubs and brewers. With energy bills set to rocket come 1st April, the last thing these businesses need is news of further price increases on key commodities and ingredients, and no end to the tough environment faced by their customers who were already watching their spend.

“We urgently need action on energy costs for businesses and a plan to get inflation under control so our pubs and brewers can trade confidently and plan for the future, rather than just making it through from one crisis to the next.”