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Restaurant Talk - Issue 13

Posted on 01/04/2022

Welcome to Restaurant talk, the newsletter that brings you the latest developments in the restaurant world. It’s unlucky Issue number 13 and in this edition we will be discussing price rises in the industry and some tips with how to deal with increasing prices in the hospitality sector in the UK.

Increasing VAT in Hospitality

As of 01/04/2022 the VAT rate has returned to the standard rate, (currently 20%) for the leisure and hospitality sectors. Previous to this the rate was 12.5% intended to aid recovery during the pandemic. Not only this but the industry is facing a year-on-year increases costs in other areas.

Hospitality's reaction to increasing prices

The hospitality sector has been proven to be resilient and reactive in these past years. However continued changes in the sector have rocked many. It's important to remember that this is affecting the whole industry and population at the moment. Therefore many chains are increasing prices; Restaurant Brands International (parent to Burger King, Tim Hortons) said it was expecting menu prices to increase in 2022 and Starbucks raised menu prices twice in three months. Additionally, customers expect prices to rise.

The important factors to remember are profitability, staying on top of pricing and maintaining mark up.

As such we have put together a list of tips to make sure your restaurant business is still profitable.

How to make sure your restaurant is still profitable

  • Easiest and highest profit food, focus on your profit leaders with possible menu reductions
  • Long shelf-life produce will improve your margins
  • Specials Boards can be used to reduce food waste
  • Work arounds for free staff meals is a "family style" meal dining all at the same time or from one dish cooked by staff.
  • Operational costs - try to track how much you spend on cleaning and upkeep and consider external cleaning services that may be less expensive than paying staff hourly.
  • Promote your own website as a source for delivery instead of delivery aggregators allowing you to reserve more profit. Some marketing expense in this area can provide great return on investment.
  • Complete a thorough labour percentage break down, FOH/BOH/Delivery/etc. Scheduling staff to manage service standards at volumes can reduce costs.
  • Look at efficiency gains to get same sales out of lower hours (equipment/tools/ quicker cook products)
  • Lastly of course raising prices can alleviate pressure if it doesn't drive away customers

Thats all for now…

This has been the run-down of the hospitality industry in Aviko's restaurant talk issue 13 we hope you have found this resource useful.

If you haven't already subscribed to our newsletter then please do. Also, if you've seen something worth shouting about let us know and we'll add it to the next edition of Restaurant Talk.