Rising energy costs
With a recent member survey showing that energy costs are up 80% year-on-year and almost half of businesses who signed a contract at the peak of the energy crisis fearing their business is at risk of failure, energy remain a key driver of inflation.
As the cost of doing business continues to increase, hospitality businesses will have no choice but to feed these increases through to the consumer. This, unfortunately, drives inflation.
UKHospitality Chief Executive Kate Nicholls said: “If the Government is to achieve its aim of halving inflation, it simply must tackle the ever-growing cost of doing business.
“We’ve seen today that food price inflation for hospitality has increased yet again, to almost 22%. Energy costs are hitting farmers, food producers and manufacturers, and hospitality businesses and will result in entrenched inflation, unless businesses can get out of energy contracts that were fixed far above the current market rate.
“While its review into the non-domestic energy market is positive, it has been ongoing for at least six months with no conclusions. The severity of the situation facing hospitality businesses requires far more urgency from the regulator and this inaction has resulted in business failure, which we have continuously warned of.
“If Ofgem is unable to act and intervene in the energy market, compelling suppliers to renegotiate with customers, then I would urge the Government and the CMA to step in, properly investigate the market and do right by hard-working businesses by taking meaningful action.”