While the budget seems to have ticked a number of boxes for the leisure and hospitality industry, manufacturers and operators are still facing significant challenges when it comes to staffing, inflation and supply chains.
The 50% cut in business rates for the sector is a welcome relief, particularly when you consider the fact that the last 18 months has seen record costs to manufacturer and supply product.
Suppliers and manufacturers have stated 'force majeure' as a reason to exit contractual obligations, and this volatility is forecasted to continue into the first quarter of 2022 at least.
While we appreciate that many suppliers and manufacturers are genuinely struggling, we have also identified businesses that are using the situation as an opportunity to inflate margins, holding customers to ransom.
For example, we have witnessed the costs of shipping containers being pre-agreed but then this price has doubled at point of delivery and handing over the ownership of the product.
Another issue is the wholesalers and manufacturers ability to serve their customers; lack of drivers and warehouse staff continues to create issues with manufacturing, picking and delivering product.
As mentioned in a previous post, Heinz took the decision to only manufacturer their volume lines. Since then, an increasing number of wholesalers are taking similar steps - increasing minimum drops and reducing delivery days, doing all they can to improve their cost to serve efficiency. This is presenting serious challenges for hospitality businesses across the country.
Many wholesalers are not taking on new customers in an attempt to maintain service to their existing customer base. The most disappointing part of this is when wholesalers are letting down loyal and often long-term customers who no longer meeting the new 'criteria' in terms of order value, drop size or delivery frequency. Many customers are being served notice with very little time to find alternative supply.
The team at Regency Purchasing Group is working with members and suppliers to avoid these situations as much as possible. We are strongly advising our members to review and adapt purchasing patterns - ordering more less often - in attempt to avoid having to source new suppliers. In the unfortunate event that a member is served notice, we are working hard to find suitable alternatives.
This situation is extremely fluid and the criteria is changing from one day to the next. In most cases, due to our strong supplier relationships, we have been able to provide our members with advance notice of changes.