As Christmas approaches, UK foodservice operators are gearing up to offer a wide range of festive treats. From cosy coffee shops to upscale restaurants, everyone has something seasonal to offer. However, the cost of these products has seen a significant increase compared to the previous year.
Festive Fast-Food
Coffee Shops, Sandwich Shops, and Bakeries are leading the charge, bringing some Christmas cheer with affordable menu options, according to data by Meaningful Vision Price Tracker.
Hot drinks, particularly hot chocolate and specialty lattes, are perennial favourites, with gingerbread, mince pie, and eggnog flavours taking centre stage. These seasonal beverages typically cost around £5 this year with an average price increase of around 10% compared to the previous year.
Cookies and cakes, including mince pies and gingerbreads, are also popular choices for a quick festive treat, with an average price of £3.50 and an 8% price increase.
Savoury options, such as Christmas sandwiches and festive toasties, have seen a 7% price increase, averaging around £5.70.
A typical lunch at a fast-food outlet, including a festive coffee and sandwich, now costs around £11, a 9% increase compared to last year.
Casual Dining at Christmas
Casual dining restaurants are embracing Christmas with festive set menus. These multi-course meals offer a variety of festive flavours, from traditional roast dinners, to innovative twists on classic dishes.
Two-course set menus in top casual dining are priced at around £25.50 this year, while three-course set menus are around £32.10. Festive set menus have seen a significant price increase of 10% compared to last year, outpacing the overall foodservice inflation rate.
The Impact of Inflation
Despite foodservice inflation steadily slowing since the start of the year, it remains higher than food and beverage inflation in retail – around 5% in fast food, and 3% in casual dining, according to Meaningful Vision’s monthly price tracking across more than 100 UK chains. However, 80% of respondents said they plan to spend the same or less than last year, although this may be difficult to achieve for many considering prices have gone up.
Maria Vanifatova, CEO of Meaningful Vision comments “The challenge for the hospitality industry lies in managing rising operational costs, compounded by increasingly cautious consumer spending. As the festive season approaches, we know that hospitality businesses are banking on an uplift in traffic, rolling out smart pricing and special offers with the aim of closing the year on a high note. However, with the UK government’s recent budget announcement, inflation could once again become a pressing issue as the cost of food service labour is set to rise significantly. These increasing costs will likely be passed directly on to the consumer through further price hikes.”
The Christmas season remains a significant period for the UK foodservice industry. It’s anticipated that consumers will continue to dine-out and indulge in festive treats, albeit with a more cautious approach to spending. By understanding consumer behaviour and offering enticing festive menus and experiences, foodservice operators may still be able to capitalise on the holiday season, even in the face of rising costs.
