It feels like the school of hard knocks these days for our hospitality clients as they continue on their path of post-pandemic recovery. Just last week, there were industry predictions that the price of food staples such as milk, butter and bread could increase by up to 50% in the coming months alone, as the food industry seeks to offset rising costs. A PWC consumer sentiment survey conducted in March 2022, also found that as inflation continues to fuel the cost-of-living crisis, consumers have revealed that dining out in restaurants is a key area they are planning to cut back on to reduce their household spend.
The results of this survey are likely to come as no great surprise to an industry that is already struggling to offset the recent inflation hikes, not to mention recover from the impact of Brexit and Covid. For an industry still trying to claw back lost revenue, it seems hospitality and catering firms will likely face yet another economic setback in the coming months. To make matters worse, the Spring Budget has also forced hospitality businesses to pass on the chancellor’s rise in VAT, which increased from 12% to 20%, seeing the sector pushed to its limits once more.
With all the hard knocks our clients acknowledge that it has never been more important to regain complete control of operational costs. Indeed, evolving industry challenges have strengthened the case for implementing intelligent technology solutions across the board, focussing on giving power back to businesses in a bid to mitigate rising costs and eliminate food wastage. Cash flow is everything right now, so cost savings - no matter how small - have to take precedence and businesses should be making use of the right technology platforms to manage day to day stock control and spending with accuracy and rigour. With access to accurate data and complete visibility of operational spend, managers and catering teams will feel empowered to make better, more informed decisions, without exceeding budgets.
The compound benefits of cost control
Many of our customers have seen instant benefits working with Zupa to control and reduce their costs. For example, one catering manager, recently noticed that even very simple changes can have a huge impact on day-to-day costs, especially over longer periods of time. The team there have revealed how the live price comparison feature within Zupa’s Caternet platform highlighted that switching from chopped tomatoes to peeled plum tomatoes, would save their business £60 in one month alone. Over a one-year period that saving is significant if you consider that is just one of the many products the business purchases every day. By applying that school of thought to every product purchased, businesses stand to make great strides in reducing costs.
Peace of mind
Our customers also have peace of mind knowing that when they order an item it is automatically added to their stock sheets in real time, reducing time spent on admin, avoiding waste and keeping inventory up to date and free form human error. Having access to live margin control and understanding exactly what every member of staff in the business has ordered in terms of goods, how much they have spent and knowing the data is integrated with the business’ financial system, goes some way to reducing the burden around cost control.
None of this is an overnight fix of course. There will certainly be more challenges to come for the hospitality sector, but if you look in the right places, technology can offer a myriad of opportunities, to make operational cost savings through automation, live data, and supplier management, all aimed at regaining full control of costs within your business. Best of all, implementing a solution that operates as a SaaS model, like Zupa, means no hefty capital expenditure up front. You simply pay as you go. Food for thought indeed.