Menu prices set to rise a further 6% in next 12 months

Leaders say they have already raised menu prices by an average of 9% in the last year, the survey shows, with more than two in three (71%) having seen significant increases in energy costs. Additionally, six in 10 (60%) have experienced significant food and drink price inflation.

“The double whammy of cost and availability issues is piling huge pressure on operators’ margins,” says Karl Chessell, CGA’s business unit director - hospitality operators and food, EMEA.

“Combined with the growing cost-of-living crisis for consumers, it means trading conditions will be very tough over the remainder of 2022.”

Businesses are also dealing with shortages of key food and drink items, the survey shows. Eight in 10 (81%) have experienced reduced product lines, while more than half have seen products not turning up (62%) or delayed (51%).

“Hospitality’s long-term future is bright, but for now leaders will have to find the right balance between absorbing soaring costs and passing them on to guests,” adds Chessell.

“The huge supply challenges also highlight the need for urgent and sustained government support for the sector.”

Despite the rising costs, hospitality leaders remain focused on making their businesses more sustainable.

Nearly half (49%) plan to introduce measures to reduce their carbon footprints, with priorities including reducing energy use or switching to renewable sources, consolidating deliveries, working with greener suppliers, reducing waste and adding more plant-based food to menus.