Hospitality and catering firms are warned to ‘Brexit-proof’ businesses ahead of the UK’s exit from the EU.
Buying specialist Lynx Purchasing says prices may rise because of the uncertainty and businesses should take measures to protect profit.
In the latest edition of the Lynx Purchasing Market Forecast, the analysts issue a warning to suppliers reliant on Christmas trade.
They forecast turkey prices will be volatile this year, reflecting the wider poultry market. This is blamed on problems in Brazil, a major supplier to the global poultry trade, expected increases in feed costs and trade arrangements, and a high demand in Europe.
Lynx says beef prices have moved steadily upwards this year because the cold winter followed by the hot, dry summer hit feed prices. Lower demand for forequarter cuts should make them better value than topsides and silversides, while steak prices will remain firm.
Both potatoes and potato products are expected to see higher prices this autumn and winter. Planting was delayed by the spring freeze and hopes that the crop would recover were given another knock as the long, hot dry summer continued.
North Sea salmon prices are down from their highest point this year but are still well above 2017 levels. Forecasts for Norwegian salmon this year are relatively low due to very cold water temperatures limiting growth.
Dairy inflation saw UK butter prices increase by 50% in the first half of the year, and while prices have stabilised to an extent, they are still higher than many operators will have budgeted for. Eggs are also expected to continue to increase in price as producers pass on higher feed costs.
The big picture is daunting
“The big picture may seem daunting, but there are still steps that every operator can take to ‘Brexit-proof’ their business, to an extent at least,” says Rachel Dobson, managing director of Lynx Purchasing.
“While we can’t change the big picture on Brexit, there are plenty of small measures operators can implement that can add up to a big difference on the bottom line.
Protect the supply chain and product availability, by wherever possible using suppliers who source from either within the UK, or from outside the EU;
Develop recipes that don’t rely on specific products from a named supplier or a particular destination or country, and design menus that can be changed quickly and cost-effectively;
Build flexibility into the system, so that chefs and managers can quickly respond to changes in supply, availability and prices;
Stay informed about what’s happening. Look behind the ‘doom and gloom’ headlines to the updates from supply chain specialists and trade associations and ask suppliers to provide up-to-date regular market information.
The Market Forecast draws on exclusive data from a range of suppliers working with Lynx Purchasing to look at hospitality buying trends.
It is available to download free from the Lynx Purchasing website at Lynx-Purchasing-Market-Forecast-Autumn-2018.