Kate Nicholls, chief executive of industry group UK Hospitality, said that some of the association’s members, which include restaurants, hotels, and bars, expect to raise prices three times before April 2022.
Addressing MPs on the the Environment, Food and Rural Affairs Committee, Ms Nicholls said an inability to raise prices ahead of Christmas would lead to inflationary pressure that would directly translate into higher prices.
“For a lot of our Christmas activities, a lot will be sold and rolled over from last year, so the price is more inflexible,” she said.
“Therefore you’re going to see a really intense squeeze on margins in the run-up to Christmas, and then an inevitable impact felt by consumers because it will have an inflationary effect.”
With significant cost price inflation coming through the supply chain, Ms Nicholls added, consumer prices would be hit hard after Christmas.
“Some of our businesses are expecting three price increases by April,” she added.
‘In no way resilient’
The country’s supply chains are currently under heavy pressure, in part due to a lack of HGV drivers and other critical workers triggered by Brexit and the pandemic.
Around 20% of all products in deliveries to hospitality businesses are currently not being delivered, said Ms Nicholls.
“Our supply chains are in no way resilient. We will deliver as good a Christmas as we are able to, but not as good as we would want to.”
Andrew Opie, director of food and sustainability at the British Retail Consortium, also MPs about a severe shortfall of labour.
“We’ve got shortages right across the supply chain, and there’s huge competition out there for jobs,” he said.
“We have to have an honest conversation about what part migrant workers play in the food supply chain. Because if we don’t solve this conundrum in the next few years, we’re going to start to see production being lost from the UK.”
