Food inflation is a fact of life and for those running businesses in the food industry, the struggle to meet persistent supplier price increases is a battle many pubs, bars and restaurants face today. Do you shop around for other product options and form relationships with new suppliers even if it means a lower quality product or do you wait it out, make provisions for the increase or try to negotiate?
Knowledge is power
Resisting price hikes from your suppliers is possible but if you stand even half a chance of having a worthwhile conversation you need accurate information to hand. Knowledge is power they say, it’s a cliché but it is true. If you can compare against a like for like competitor, or you have taken the time to research the market you operate in, you will be better equipped to form a case against unreasonable or unsubstantiated price increases. If the supplier doesn’t go for it, you will have something to fall back on in terms of other suppliers offering products at the right prices so you can easily jump ship if you have to rather than be held to ransom.
For years people have been talking about price volatility becoming more stable in the future but few businesses can afford to operate on ‘possibilities’ and ‘maybes’. Taking action and planning for rising prices is the only sensible move. Making improvements in your purchasing processes and systems will also help because anything that impacts the bottom line profit has to be controlled. Using advanced technology to help control your spend and ensuring that the supplier order process is managed effectively, will give you greater power for negotiation with your suppliers.
Online purchasing systems
When trying to minimise the impact of price increases across your business, all of the usual suspects should be considered too, such as food waste, stock control, centralised invoicing and over-ordering. Using a fit-for-purpose online purchasing system will also help you to tackle the impact of price hikes more efficiently.