Industry procurement specialist fears price hikes for kitchen operators aren’t over yet

One of the industry’s leading procurement providers is hoping the warmer weather will bring some much-needed respite after admitting the first quarter was even worse for its members than it had expected.

The Regency Purchasing Group said the extended cold snap, coupled with an early Easter and overall uncertainty in the market, has “added insult to injury” amid what was always going to be a difficult environment anyway.

Managing director, Alex Demetriou, commented: “The snow meant that people simply didn’t go out, so many tables in restaurants were cancelled, as were entire events, many of which have not been able to be re-scheduled. If someone cancels one evening, they don’t go out the next day and have two dinners, so the restaurant and pub loses out.”

Mr Demetriou said new levels of taxation, increases in business rates, continuing pressures around the minimum wage, the exchange rate, insurance premium tax, apprentice levy, rising food costs and the on-going uncertainty around Brexit, have all contributed to “extremely challenging” times for the sector.

The winter weather is also set to add more misery yet, as prices could rise even further due to the severe cold spell, he added.

“The issue here has been lack of grazing for animals, which means farmers have had to keep livestock indoors for longer. This means they’ve had to be fed more hard feed, which will push the overall price up, since the cost to the farmers has increased.”

2018 has already seen significant levels of business closures, with the Prezzo Group, Strada and Jamie’s Italian chains all shutting around a third of their restaurants in a bid to make the remaining establishments within their businesses viable.

Mr Demetriou continued: “There have been some green shoots over the past couple of weeks, where we have finally seen some sunshine, and people have started to come out, but the leisure industry has already missed out on the chance for its first boost to business, which usually comes around Easter.

“A combination of Easter being earlier, plus the bad weather, meant that this Easter was not a good one for the leisure industry as a whole. Many of the large visitor attractions are reporting numbers around 35% down on the previous year. But with two bank holidays in May, plus the Government’s decision to allow the pubs to open for longer on May 19th, the day of both the Royal Wedding and the FA Cup Final, hopefully things will finally start to begin picking up.”

The Regency Group works with more than 2,700 leisure businesses throughout the UK, including leading tourist attractions, golf clubs, pubs and hotels.

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