UK restaurant and coffee prices rise by up to 26% in two years
Prices of some of the most popular high street meals, snacks and drinks have risen by as much as 26% since 2020 as food outlets face the highest inflation since the 1980s. Restaurant bosses warn of widespread closures as businesses struggle with the costs of heating their premises, staff shortages and rising ingredient prices.
UKHospitality, which represents about 740 companies, says food businesses are struggling with inflation of about 18% on their total costs, from food to energy bills. This means consumers are seeing price increases on some popular menu choices.
Analysis by the Observer of menu prices at high-street chains found that at Nando’s chicken restaurants since October 2020, a half chicken has risen from £6.75 to £8.50 (up 26%); 10 chicken wings are now £11.75 instead of £9.60 (up 22%); and a Choc-A-Lot cake dessert has risen has gone up from £4.15 to £4.75 (up 14%).
Over the same period at Zizzi in central London, the price of a spaghetti chorizo carbonara meal has risen from £11.70 to £14.25 (up 22%); a chicken and prosciutto salad has gone from £12.25 to £14.50 (up 18%); and sweet potato fries from £3.90 to £4.25 (up 9%).
At the 25-strong Real Greek restaurant chain over the same period, the price of a portion of halloumi fries has gone from £5.95 to £6.95 (up 17%); a souvlaki wrap has risen from £6.45 to £7.50 (up 16%); and a portion of salt cod has gone from £6.90 to £7.95 (up 15%).
McDonald’s announced in July that it was increasing the price of its cheeseburger from 99p to £1.19 (a 20% increase). It said this was the first time it had increased the price in 14 years.
Analysis by coffee supplier UCC, published earlier this year, found that between August 2021 and July 2022, the price of popular coffees had increased by as much as 22%. The drinks, purchased at outlets in Buckinghamshire included a small Starbucks espresso, which had gone up from £1.80 to £2.20 (22%); a Pret a Manger medium cappuccino, which had gone up from £2.75 to £3.05 (11%); and a Caffe Nero flat white,
which had gone up from £2.85 to £3.00 (5%).
A business survey of pubs, clubs and restaurants, published last week by research company CGA working with software firm Fourth, found that average food menu prices had increased by 13% over the year and that drinks prices had risen by 11%.
The report stated: “We are already seeing the impact of uncertainty in the sector with 2,200 net closures in recent months. [Without] further support, more closures are to be expected.” One of the restaurants now under threat is Simpson’s Tavern in London, a City chophouse which opened in 1757. It has shut down in a dispute with the landlord and has launched a crowdfunding campaign to try to save it.
Kate Nicholls, chief executive of UKHospitality, said: “The sector has been overwhelmed by one crisis after another and is incredibly fragile. We lost about 10% of the industry during the pandemic and we could lose as many businesses again if we do not get more support.” The industry is calling for further business rates relief and for the energy bill relief scheme to be extended beyond April next year. It says a cut in VAT for the sector would also provide a boost as it struggles with mounting costs.
Will Beckett, co-founder and chief executive of the Hawksmoor group of steak and seafood restaurants, said while there was still strong demand in some sectors of the industry, which included his group, many restaurants faced mounting costs, significant borrowings and falling demand. “They are often overwhelmed with debt and are starting to go bust faster than ever,” he said. “It’s a very difficult time.”.
Nando’s said its price increases in the past year had been below the annual 13% menu price inflation found by the CGA research. A spokesperson said: “Like many, we’re impacted by the rises in the cost of ingredients and in running our restaurants. Some items have only increased marginally, and well below both inflation and the industry as a whole, as we try to absorb as much as we can for our customers.”