Food enthusiasts in the UK are likely to pay more for their favourite meals following the recent Budget announcement, which has left many restaurants and pubs struggling to cope with rising costs. According to industry analysts, establishments will be compelled to pass on the increased prices for food and drink to consumers as they did not receive adequate support from the Chancellor.
The Lynx Purchasing Winter 2025 Market Forecast report highlighted that prices for staples like cod and haddock are “increasing sharply.” Additionally, it warned that consumers could face “very high costs for some core Christmas menu products, such as turkey and beef.” The report’s findings come at a time when 60% of UK residents are planning to be more price-conscious this Christmas, triggered by a significant drop in consumer confidence following the Budget.
Soaring Commodity Costs Affect Festive Menus
The catering supply firm also pointed out that escalating commodity prices, particularly for cocoa and coffee, would further drive up the costs of festive favourites like yule logs and espresso martinis. The report stated, “Coffee commodity prices have more than doubled since the start of last year as major producers, such as Brazil and Vietnam, struggle with the impact of extreme weather and climate change.” Similar challenges are affecting cocoa crops, leading to higher prices from suppliers that are likely to persist.
Rachel Dobson, managing director of Lynx Purchasing, expressed disappointment with the Budget’s impact on the hospitality sector. “For the most part, hospitality didn’t get the support it was looking for from Rachel Reeves’ Budget,” she noted. While some relief on business rates is welcomed, the industry had advocated for broader tax concessions and must also contend with rising wage costs.
Impact on Christmas Celebrations
As the festive season approaches, Dobson pointed out that the high costs of essential menu items—such as turkey and beef for traditional Christmas dinners—are significantly impacting profit margins. She remarked, “Very high costs for some core menu products, such as turkey and beef, or the coffee in a festive espresso martini and the chocolate in a yule log, have severely dented margins.”
The report emphasizes that hospitality operators need to quickly move past the disappointing Budget while accepting the reality of elevated prices for essential Christmas products. The mounting pressure on the industry could lead to more significant shifts in how establishments plan their menus and pricing strategies for the upcoming holiday season.
In summary, as food prices continue to surge due to external pressures and insufficient support from the government, consumers can expect to see higher costs for their favourite dishes this Christmas. The hospitality sector’s struggle to maintain affordability amidst soaring commodity prices raises concerns about the potential impact on overall consumer spending during this critical time of year.
