Majority of hospitality business leaders likely to raise prices due to supply chain issues

Three-quarters of hospitality business leaders are likely to raise prices for customers as a result of supply chain issues and growing costs, according to the latest Business Confidence Survey from CGA and Fourth.

The survey of 200 multi-site hospitality business leaders found 99% were experiencing supply chain issues, while 88% had to contend with reduced product lines.

Some 82% have seen deliveries of products delayed while 84% have had orders fail to turn up completely.

Over 70% said food and drink costs had risen and 68% said access to products from Europe was a major area of concern. Nearly three-quarters were concerned about the price of cleaning supplies while around two-thirds had seen the cost of sub-contracted services like builders and cleaners and utilities also increase.

Three in four (76%) of the business leaders surveyed said they will have no choice but to pass the costs on to consumers by increasing their prices.

“Delivery problems and cost pressures have come at the worst possible time, with thousands of pubs, bars and restaurants only just finding their feet after months of lockdown,” said Karl Chessell, CGA’s director - hospitality operators and food, EMEA.

“This two-pronged crisis highlights the need for targeted government intervention and sustained support to protect thousands of businesses and jobs in the months ahead.”

Sebastien Sepierre, managing director – EMEA, Fourth, said: “The survey paints a very stark picture of the supply chain crisis that is severely impacting hospitality businesses right now. Many in the sector are concerned about how it will impact this year’s festive season, particularly in light of the fact last year’s Christmas trading was severely curtailed by Covid restrictions."

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