Cost of Living Crisis: Three UK hospitality talking points from May

Egg Soldiers tackles three May cost-of-living crisis topics from within UK hospitality, with truffle troubles, mid-market chain questions, and 'bill shock' all covered
Italian food on a table
The UK cost-of-living crisis rages on, and while the British Retail Consortium (BRC) and Nielsen recently revealed that food inflation fell slightly in May, raising hopes of a 'peak' that's now been and gone; the day-to-day challenges for operators across the hospitality industry very much remain, with flexible operational strategies now essential across the board.

Here at Egg Soldiers, we're continuing to prioritise reactive, dynamic tactics for clients both big and small, delivered across our expanding suite of hospitality business services, to ensure effective, fleet-footed cost-of-living pivots designed to safeguard profitability and keep business models sustainable.

As part of our Insights Lab, we believe in regularly discussing the everyday cost-of-living obstacles now faced by both individual and group operators across the UK, digging deeper and encouraging broader conversation, with the team this month highlighting the importance of transparency with rising ingredient costs, the drivers behind Toridoll's bold casual-dining expansion plans, and a growing set menu focus as restaurants look to avoid 'bill shock' among diners.

Flour & Grape says goodbye to truffles
The now-departed truffle taglierini by Flour & Grape
At the end of April, Bermondsey Street-based Italian restaurant, Flour & Grape, announced that its truffle taglierini dish was to be taken off the menu due to unsustainable price hikes by its truffle supplier.

In a post on Instagram, the brand said:

"Post pandemic we’ve been absorbing the continuing rising costs across the board so that we can still deliver super delicious & affordable pasta & wine.

"Sadly though the latest price hike of 40% from our truffle supplier is just not sustainable.

"Our truffle taglierini has been a @flourandgrape stalwart but to keep it would result in an eye watering price increase which goes against our philosophy & values."

Over the course of May, consumer reaction to the demise of Flour & Grape's popular truffle pasta dish was one of sadness, dovetailed by an appreciation of transparency from the team. And, with the dish given five more days from the date of the post, Flour & Grape later revealed the Truffle Taglierini was "flying" out as diners flocked to enjoy it one last time.

"Sad to see it go but thanks for sharing your challenges and rationale for taking it off the menu," one Instagram follower commented. "I love the transparency and completely appreciate the importance of keeping things commercially viable."

Since announcing the end of the truffle taglierini, the restaurant has revealed two new dishes: Mezzaluna with a ricotta, broad bean & pea filling, smothered with a mint butter emulsion; and a creamy bucatini cacio e pepe.
  • Toph Ford
    Co-Founder & Creative Director, Egg Soldiers
    "There's no one single approach to keeping a food business going through a cost of living crisis. But it's always wise to assess ingredient price trends and have strategies in place to effectively pivot.

    "It's all about adapting to your customers' needs in a way that's authentic to your business: if you're a local independent focused on food transparency and sustainability, and can no longer sustainably use certain ingredients; don't use them and be honest with your guests about why and what the upside is for them.

    "More often than not, your transparency and honest reasoning will resonate, with your clear focus on how price increases impact consumers, coupled with new items on the menu, consolidating trust and proving that your business model is forward-thinking and adaptable."
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Big chain mentalities evolving from mid-market?
Last month, Egg Soldiers' Head of Trends, Kateline Porritt, spoke to William Reed's MCA Insight about the news that Japan's Toridoll is finalising a deal to buy Fulham Shore, which owns pizza chain Franco Manca and The Real Greek restaurants, for £93.4m, with plans to expand in the UK and internationally.

She pointed out that such restaurants offer comfort, nostalgia, and often affordability – making it a win across demographics, including families.

“Franco Manca and The Real Greek both do what they do very well and consistently,” she said. “They are reliable brands that are authentic enough to their respective cuisines to be exported; that is, they are not too niche or Anglicised.

“The best thing about the two restaurants is they are not trendy in a faddy way which means they have staying power. The trend they are riding is that of simplicity and accessibility.”

Toridoll's plans to expand both brands across the UK and internationally comes straight from the multinational restaurant chain handbook, with many big names - from Tim Hortons to Popeyes - noticeably enacting bold expansion plans in the last few years, both consolidating in existing channels and emerging into new markets.

Big investment is the link here, and with The Financial Times this week publishing a feature on the plight of UK mid-market dining chains, with many said to be "struggling to recover from the lows of the pandemic"; Toridoll's move, depending on success, could be just the start as investors look to capitalise even further on the cost-of-living chaos, beyond simply snapping up prime bricks-and-mortar locations as operations sadly exit, but by blurring the lines between mid-market and big chain restaurant expansion strategy with accessible, reliable casual-dining brands.
  • Kateline Porritt
    Head of Trends, Egg Soldiers
    "As reported in The Financial Times, data from CGA by NielsenIQ and AlixPartners shows that the number of casual-dining outlets across the UK fell 4.2% to 5,160 nationwide in the 12 months to March this year, declining at nearly double the rate of the pub sector.

    "Indeed, Frankie & Benny’s owner The Restaurant Group, Prezzo, Richard Caring-owned chain Bill’s and burger joint Byron have announced more than 100 closures between them this year.

    "For investors, it's not a bad time to buy, what with prime bricks-and-mortar opportunities ever-rising.

    "Toridoll's move obviously goes further than that, with three descriptors from its official offer for Fulham Shore on the London Stock Exchange catching the eye: 'authentic', 'affordable' and 'robust'.

    "While this is an almost-£100m acquisition scenario, not to mention the eye-watering sums sure to be involved in the expansion plans; those three descriptors should ring true across the hospitality industry as we continue on in this cost-of-living crisis.

    "Authenticity and affordability means memorable flavour and value for the diner, with a robust operational strategy crucial to any success.
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Set menu solutions for avoiding 'Bill Shock'
Last month, Egg Soldiers' Kateline spoke to The Times about rising prices in UK restaurants and the issue of 'bill shock' for many following a meal.

Menu innovation is key in times of economic crisis, with 'snacks' and/or 'bites' emerging as a way of offering something different to diners other than the standard 'starter'.

However, as Kateline points out in the piece; tapas-esque starter options can still lead to a bit of a shock come the bill.

“It’s trying to offer them something else," Kateline said of restaurants adding snacks and bites to menus. "But maybe that’s where you see the bill creep. They are not a full starter, but you end up ordering them because you get excited and get loads to share.”

Also discussed was the fact that restaurants are increasingly offering set-price menus to avoid customer confusion as to what they were expecting to pay come the end of the experience.

“There are people in the industry who really want to avoid that bill shock — because they want repeat customers,” Kateline said. “And it [set menu offerings] is great for the restaurant because they are buying higher volumes of a smaller number of ingredients and they can streamline their labour.”
  • Stefan Cosser
    Co-founder & Managing Director, Egg Soldiers
    "As pointed out in our free whitepaper, 'UK Hospitality Food & Drink Trends To Watch 2023/24'; flexible set menu tactics are increasingly becoming an invaluable tool for restaurant operators as a way of reaching penny-pinching consumers sacrificing many weekly pleasures to bolster embattled bank accounts, with zero waste strategies now being explored to deliver cost-effective, multi-course dining experiences.

    "An ever-rising trend not only in hospitality, but across every area of the food industry, zero waste foods can be creatively harnessed to not only create on-trend, experience-led menus for cash-concious diners, but also improve restaurant sustainability credentials, increase the value of lead ingredients, and fundamentally streamline costs.

    "Egg Soldiers' Insights Lab was first to identify this opportunity back in November 2022, putting us well ahead of the curve, with the team having since developed a suite of effective zero waste food strategies to be implemented across a range of set menu structures.

    "If you're considering new menu concepts or are reviewing your current proposition amid soaring inflation and spend-per-head concerns, do get in touch with us to see how our expert team can help you design, develop and refine your offering to keep you ahead of your competitors."

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