top of page
Search
Writer's pictureSimon Grayson

'How much!?!

It's that time of year again when publicans and restauranteurs have to assess the impact of increased cost of sale, be it from suppliers (the whole supply chain is under immense pressure), utilities, of wages and national insurance, rent, maintenance, the list goes on....and this year is a real belter!!

The government have recently published inflation figures hovering at 5.4%, though, in reality, the rise in costs affecting our industry are significantly above this. Recently, for example, Heineken announced price increases across the board, of draught products, of 7% (With other brewers to follow suit) .In order for hospitality venues to simply maintain their margins, this would mean increases at the pump of at least 30p per pint - the inevitable reaction will be often be aimed at the operator; it really isn't their fault. The well publicised, acute labour shortage, has led to increased wages paid in excess of 10% (In many ways a positive move as labour has often been seriously undervalued in the sector), coupled with the rise in minimum wage and NI due to take effect from April 1st. Energy prices are, frankly, terrifying - the impact is yet to be realised, though will be fierce. Lamb prices have gone up by an average of 14% in February 2022, with beef going up by 18% in December, don't even mention dairy; with more rises, across the food category, to come. Ahh, and there is the small matter of VAT on food and soft drinks increasing by 7.5% on April 1st as well.




As an operator, I hold my head in my hands whilst writing up new price lists this year; we have to make a profit and it shouldn't be a dirty word. The reality is that independent sole traders are subject to increasingly fragile margins, that we are under continuous fire for protecting. Like many people in my position, we don't want to increase prices, or cut corners when it comes to quality, though we simply cannot afford not to pass on the increases, without affecting the latter. Different channels within the on trade will respond according to their business models. Those who focus on volume may look at driving even more footfall by product switches and strategic offers, as more equity is transferred to price - the independent, single site operator, may choose to focus more on quality and service as well as un costed added value, as consumer trends may well migrate to less local visits, though with an increased spend in each case. We have, as have our friends across the trade, carried out exhaustive supplier reviews just to ensure that we, as well as our customers, get the best deal possible with regards to product and price, putting value for money at the forefront of our offer (Which doesn't and indeed shouldn't, equate to 'cheap'). Our customers work extremely hard for their income and we have a responsibility to provide the best service we can for them. It could be argued that price increases may lead to more competitiveness and ultimately a better deal for the customer.

The inevitable comparison, (which seems to exclusively target the hospitality sector) of comparing the cost of the whole experience of going out, to the cost of just the raw materials, in isolation, from supermarkets, will be expounded, no doubt with vigour, over the next few months. It is a totally natural thing do do and, in some ways justified. On one hand it highlights the pitted playing field between the taxation of products and subsequent pricing by supermarkets and the huge gap with those of the on trade and, on the other, it clearly illustrates a high cost of service that is very real and under pressure.

At The Monk, we have invested a huge amount of resource in redeveloping our business, by recruiting very talented and experienced staff, as well as developing our product range. This together with a revamp of the trading space and careful attention to detail we really do hope, adds value to the experience. We are committed to quality and really do try to get it right. There are going to be price increases, we'll keep them as tight as possible and add value in every other area that we are able to. In the meantime, we have been overwhelmed by the support we have had since lock down, as it has been tough and we haven't always gotten it right. We continue to learn and to develop and listen to our customers as they are always (almost) right!!! Really looking forward to seeing you soon


189 views0 comments

Recent Posts

See All

Comments


bottom of page