Food overtakes rent as biggest cost for restaurateurs
The cost of food has overtaken rent and rates to move and sits second only to staff costs in a list of major overheads facing UK restaurants, according to a new survey.
The fourth Livebookings European Dining Index, based on interviews with 200 restaurants, showed that 74% cited food costs as the factor that has most impacted menu prices over the last six months, followed by tighter consumer budgets and staff costs.
Nearly all restaurants (90%) reported that a rise in their food bills over the past two quarters and said that in the last six months, food costs were the biggest single expenditure increase.
Food costs rank higher than any other expenditure for nearly a quarter (24%) of restaurateurs, and come second only to staff costs, which remain the principal cost base for roughly one in three (34%) restaurants.
Rent and rates have dropped down the list, and compared to the number of restaurants whose highest cost is the staff wage bill, only half as many say the same thing about what they spend on utilities (18%).
Colin Tenwick, chief executive of Livebookings said: "They have survived the recent economic decline, and are seeing improvement in the number of customers through the door, but many restaurants operating today are still facing a daily mission to maintain a sustainable profit margin. The rising cost of produce creates a need to constantly reassess their supply chain, and what they offer to customers. No doubt the industry will show its characteristic resilience and creativity to overcome the challenge, and it's likely we'll see a rise in things like single concept restaurants as restaurant owners aim to tightly control their cost centres, and protect their margin."