Solutions for managing inflationary pressures within foodservice

Employer National Insurance Contributions has increased from 13.8% to 15% with the tax threshold falling from £9,100 to £5,000, drawing in thousands of part-time hospitality workers​.

– NICs changes will cost hospitality £1 billion. ​

– Employer NICs for a part-time worker (15 hours) will increase by 73%.

– The total NICs bill for a full-time worker on minimum wage is now £2,900, up over £1,000.

The National Living Wage (21+) increased by 6.7% from £11.44 to £12.21, higher than the Low Pay Commission’s mid-point estimate of £12.10. The 18-20 rate increased by 16.3%, from £8.60 to £10.00. The 16-17 rate and the apprentice rates rose by over 18%.

– Minimum wage rate changes will cost the sector £1.9 billion, leading to price increases. ​

– Youth employment is at risk as these increases take effect.

– The combined increase in NLW and NICs adds £2,500 to the cost of employing a full-time worker.

In England, business rates relief for the 2025/26 tax year was reduced from 75% to 40%, with a cap of £110,000. Reform announced for 2026/27, with a new multiplier for hospitality, retail and leisure.

– £500m increase for hospitality through a cut in relief. ​

– Multi-site businesses are still restricted from benefitting from relief.

Digital technology makes it easier than ever to run targeted promotions, deals and loyalty schemes to keep customers coming back. Whether it’s offering discounts on slower days or rewarding loyal customers with special deals, these strategies can encourage footfall even when times are tough. Many customers are more likely to return for promotions that provide added value without sacrificing quality.

The “lipstick effect” is an economic theory that suggests people are more likely to buy small, affordable luxury items during economic downturns. Offering exciting, everyday treats such as small indulgent desserts or premium beverages, can appeal to customers looking for affordable luxuries. Even in tough economic times, customers are willing to spend on small indulgences that provide a sense of luxury without breaking the bank.

If you must increase prices, be strategic about how you do so. Focus on protecting your key menu items, especially the ones that customers are most cost-conscious about, such as their favourite mains. You can increase or premiumise your prices on starters, sides or desserts, where customers may be more willing to pay a bit more. This allows you to maintain profitability while not alienating your most loyal customers.

To encourage customers to make choices that benefit your bottom line, highlight your highest gross profit dishes prominently on your menu. Placing these items in key areas, such as at the top of the menu or in a special section, can help draw attention to them and increase sales. Remember, when you sell a dish, you bank £ not %. Focus on high-profit items and ensure your customers see them.

For more tips on creating profitable menus, click the button below:

Seasonal ingredients are generally more affordable than out-of-season products, making it essential to update your menu regularly to reflect what’s in season. This not only helps reduce food costs but also keeps your offerings fresh and exciting for customers.

Our fresh food brand, Oliver Kay shares the latest availability, trends, new products and recipe inspiration for seasonal menu planning.

Click the button below to explore their seasonal support.

Reducing food waste is essential not only for controlling costs but also for promoting sustainability which is a growing priority for customers. Effective inventory management, strict portion control and creative use of surplus ingredients are all great ways to keep food waste at a minimum. By doing so, businesses can lower operating costs while continuing to deliver the high-quality experience customers expect.

Learn more solutions for food waste management by clicking the button below.