The prices of some of the most popular high street meals, snacks and drinks have risen by up to 26% since 2020 as food outlets face the highest inflation since the 1980s. Restaurant bosses are warning of widespread closures as businesses struggle with heating costs, staff shortages and rising ingredient prices.
UKHospitality, which represents around 740 businesses, says food companies are struggling with inflation of around 18% of their total costs, from food to energy bills. That means consumers are seeing price increases on some popular menu options.
The Observer’s analysis of menu prices at high street chains found that in Nando’s chicken restaurants since October 2020, half a chicken has risen from £6.75 to £8.50 (a 26 %); 10 chicken wings are now £11.75 instead of £9.60 (up 22%); and the Choc-A-Lot cake dessert has risen 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 chips 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 chips has risen 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 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). He said it was the first time the price had gone up 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 risen by up to 22%. Drinks, bought at Buckinghamshire outlets included a small Starbucks espresso, which had fallen from £1.80 to £2.20 (22%); a Pret a Manger medium cappuccino, which had risen from £2.75 to £3.05 (11%); and a flat white Caffe Nero, which had fallen from £2.85 to £3.00 (5%).
A business survey of pubs, clubs and restaurants, published last week by research firm CGA working with software firm Fourth, found that average food menu prices had risen by 13% over year and that drink prices had increased by 11%.
The report said: “We are already seeing the impact of uncertainty in the sector with 2,200 net closures in recent months. [Without] more support, more closures expected.” One of the restaurants now under threat is Simpson’s Tavern in London, a city chophouse that opened in 1757. It has closed in a dispute with the owner and launched a public funding 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 around 10% of the industry during the pandemic and could lose that many businesses again if we don’t get more support.”
The industry is calling for further reductions in trade tariffs and for the energy bill relief scheme to be extended beyond April next year. He says a VAT cut for the sector would also provide a boost as it struggles with rising costs.
Will Beckett, co-founder and chief executive of the Hawksmoor group of steak and seafood restaurants, said that while there was strong demand in some sectors of the industry, including his group, many restaurants were facing costs growing, significant debts and falling demand. “They’re often overwhelmed with debt and starting to go broke faster than ever,” he said. “It’s a very difficult time.”
Nando’s said its price rises last year had been below the 13% annual menu price inflation found by the CGA’s investigation. A spokesman said: “Like many, we are affected by the rising cost of ingredients and running our restaurants. Some items have only risen marginally, and well below both inflation and the industry as a whole, already which we try to absorb as much as we can for our customers.”