Rising cost of food is biggest concern for restaurant operators

By Emma Eversham

- Last updated on GMT

Related tags: Cost

Dealing with the rising cost of food is the biggest concern for more than half of restaurant companies
Dealing with the rising cost of food is the biggest concern for more than half of restaurant companies
Dealing with the rising cost of food is the biggest concern for 57 per cent of restaurant operators according to some of the latest research.

Interviews with 118 leading restaurant executives by analysts Allegra Strategies revealed that food inflation, which hit 4.9 per cent last month, topped a list of areas of concern among operators.

Weak consumer confidence and high labour costs followed at 21 per cent and 19 per cent respectively while getting hands on capital (19 per cent) and attracting high quality staff (17 per cent) also figured highly in the list of challenges operators felt they needed to overcome this year.

Only 70 per cent of restaurant companies reported postive like-for-like sales in the first half of this year, compared with 77 per cent for the same period last year and industry confidence in the trading environment is less than it was last year.

Value not discount

Despite many operators feeling concerned over the current economic situation, those taking part in a panel debate at Allegra's Restaurant Leader Summit said they would not resort to heavy discounting to drive sales.

"A while back we decided it wasn't our ball game to discount," said Carluccio's chief executive Simon Kossoff. "We don't do it. We try and run promotions without it being 2-for-1 as we think it gives people better value"

YO! Sushi's chief executive Robin Rowland said his company had stopped offering discount vouchers. "Whenever we do something it goes viral," he said. "If we discount our standards go down. Long term we will come out of recession and if you have based your business model on discounting where do you go?"

Dominic Lake, co-founder of Canteen, said 'bundling items together' that were already on the menu was the best way to give diners value without resorting to discounting. "The only solution to appealing to the value conscious consumer and highlight the quality of what you do is to run a fixed price menu," he said.

Top 10 business challenges:

  • Rising Food Costs (57%)
  • Weak consumer confidence (21%)
  • High labour costs (19%)
  • Access to capital (19%)
  • Consumer price sensitivity (17%)
  • Attracting high quality staff (17%)
  • High rents/property costs (17%)
  • Lack of suitable A3 property (15%)
  • VAT increase (13%)
  • Raising profitability (11%)

Related topics: Business, Restaurants, Trends & Reports

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