Hard-Pressed Hospitality Faces Supply Chain Challenges, Warns Lynx Purchasing

Hospitality operators working flat out to deal with the challenges of the tightening of Covid restrictions will also have to cope with a series of challenges set to disrupt supply in the coming months, warns buying specialist Lynx Purchasing

Planning for uncertainty could well be the definition of the ‘new normal’ for hospitality, says Lynx, as it publishes the Autumn edition of its regular Market Forecast.  As operators try to plan for what would usually be the peak trading period, the impact on trading of restrictions including 10pm closing and the new three-tier system shows how fragile the sector remains.

Lynx warns that the combination of the continuing pandemic and uncertainty over Brexit are having an impact right through the supply chain, not just at the front line.

“The Eat Out To Help Out scheme clearly did its intended job, with almost all operators seeing an uplift in sales,” said Rachel Dobson, managing director of Lynx Purchasing. “For many, this continued into September, helped by continued offers and discounts.

“However, the new restrictions are forecast to last at least six months, with even stricter measures for those in the higher tiers, to control spread of the virus. The final three months of the year is the key trading period for the hospitality sector, and restricted hours and limits on the numbers that can meet will have a clear impact.”

The Market Forecast offers operators an in-depth look at pricing and product trends over the coming months, using exclusive data gathered from the range of suppliers who work with Lynx Purchasing.

The latest edition also spotlights other key challenges impacting the hospitality supply chain:

• People – many businesses had to cut back on staff during the lockdown, and this would take time to rebuild even if levels of consumer demand were guaranteed – which they aren’t. Right through the supply chain, producers, growers, manufacturers, distribution, pickers and packers are working with lower staff levels.

• Availability – many suppliers have cut back their range to focus on core products, and bringing back a wider choice isn’t as simple as turning on a tap. Some products will continue to be in short supply.
• Transport – the cost of moving goods is high, due to factors such as staff shortages and less freight on the move generally, creating uneconomic ‘empty leg’ journeys.
• Brexit – the UK leaves the EU at the end of the year, and uncertainty over the ease, or otherwise, of importing and transporting goods remains a key concern.

Specific menu areas that operators will need to be aware of over the coming months include:

Meat & Poultry: Demand for beef boomed during the Eat Out to Help Out campaign as hospitality customers treated themselves, and this is expected to have a knock-on effect through the autumn and winter, pushing up the price of steaks and other premium beef cuts.

Fish & Seafood: The winter months are more of a challenge for home-caught fish, as boats are able to go out less often, which reduces choice and availability, while the crucial post-Brexit fisheries arrangements have still to be agreed.

Dairy & Flour: With a global shortage of grain, there is upward price pressure on eggs, due to both high demand for free range eggs in particular, and the higher cost of poultry feed. The grain issue has also affected the availability of flour, which will be seen in prices of pre-made baked goods such as bread, cakes and desserts.

“We’re working hard with our suppliers to offer operators as much clarity as we can, but most of the uncertainty is generated by factors beyond the hospitality sector’s control,” adds Dobson. “Our advice is not to be tempted to over-order on core products, not only because it can create more widespread availability problems, but also because customer demand is uncertain and operators could end up with products they can’t sell, creating waste.

A free copy of the Autumn 2020 Lynx Purchasing Autumn 2020 Market Forecast is available to download at Lynx-Purchasing-Market-Forecast-Autumn-2020.

Source: Lynx Purchasing

  COVID-19, Hospitality, Lynx Purchasing, Rachel Dobson, Research