Prices of some of the most popular main meals, snacks and beverages have risen by as much as 26% since 2020 as food outlets face the highest inflation since the 1980s. Restaurant chiefs are warning of widespread closures as companies struggle with heating costs for their buildings, staff shortages and soaring ingredient prices.
UKH Hospitality, which represents about 740 companies, says food companies are struggling with inflation of around 18% on their total costs, from food to energy bills. This means that consumers are seeing price increases on some of the popular menu options.
Analysis by observer From menu prices at supermarket chains I found that at Nando’s Chicken restaurants since October 2020, half a chicken has gone from £6.75 to £8.50 (up 26%); 10 chicken wings are now priced at £11.75 instead of £9.60 (up 22%); The Choc-A-Lot cake dessert rose from £4.15 to £4.75 (up 14%).
During the same period at Zizzi in central London, the price of a chorizo pasta carbonara rose from £11.70 to £14.25 (up 22%); Chicken and Prosciutto Salad prices increased from £12.25 to £14.50 (an increase of 18%); and french fries from £3.90 to £4.25 (up 9%).
At Real Greek’s 25-restaurant chain over the same period, the price of a portion of halloumi potatoes increased from £5.95 to £6.95 (an increase of 17%); Souvlaki rolls increased from £6.45 to £7.50 (an increase of 16%); A portion of salt cod rose from £6.90 to £7.95 (an increase of 15%).
McDonald’s announced in July that it had raised the price of its cheeseburger from 99p to £1.19 (20% increase). She said this was the first time she had raised the price in 14 years.
An analysis by coffee supplier UCC, published earlier this year, found that between August 2021 and July 2022, the price of popular coffee increased by as much as 22%. Drinks bought from outlets in Buckinghamshire included a mini Starbucks espresso, which rose from £1.80 to £2.20 (22%); Medium Pret a Manger cappuccino, which rose from £2.75 to £3.05 (11%); and a flat white Caffe Nero, which rose from £2.85 to £3.00 (5%).
A business survey of bars, clubs, and restaurants, published last week by CGA Research working with the fourth software company, found that average menu prices rose 13% over the year and drink prices increased 11%.
The report stated: “We are already seeing the impact of uncertainty in the sector with 2,200 net closes in recent months. [Without] More support, more closures expected.” One restaurant now threatened is London’s Simpson’s Tavern, a city restaurant that opened in 1757. It closed in a dispute with the owner and launched a crowdfunding campaign to try to save it.
Kate Nichols, chief executive of UKH Hospitality, said: “The sector has been hit by crisis after crisis and is very fragile. We have lost about 10% of the industry during the pandemic and could lose many businesses again if we don’t get more support.”
The industry is calling for further business price relief and an extension of the energy bill relief plan beyond April next year. She says a cut in the sector’s value-added tax will also provide a boost as it struggles with rising costs.
Will Beckett, co-founder and CEO of the Hawksmoor group of steak and seafood restaurants, said that while there was still strong demand in some sectors of the industry, including his group, many restaurants faced increased costs, large loans and declining demand. “They often sink into debt and start bankruptcy faster than ever,” he said. “It is a very difficult time.”
Nando said its price increases last year were less than the 13% annual list price inflation found by CGA research. A spokesperson said: “Like many, we have been affected by increases in the cost of ingredients and the management of our restaurants. Some items have only increased marginally, much less both than inflation and the industry as a whole, as we try to accommodate as much as possible to our customers.”