Hospitality’s supply chain under pressure after COVID-19 impacts bite

COVID-19-related disruption has caused supply difficulties for more than nine in ten hospitality operators since they reopened in July, a new survey by CGA and Prestige Purchasing reveals.

COVID-19-related disruption has caused supply difficulties for more than nine in ten hospitality operators since they reopened in July, a new survey by CGA and Prestige Purchasing reveals.

 

It shows that just 8% of operators have escaped supply challenges since the end of the first national lockdown, while only 9% have not encountered any delays. Nearly three quarters (73%) think service levels have decreased since July, while only 5% think they have improved. The findings reflect the complex challenges faced throughout the hospitality supply chain, including widely fluctuating demand as a result of local lockdowns and new restrictions.

 

But the survey also shows how suppliers have been working hard to mitigate the worst of the difficulties for hospitality businesses. Only a quarter (26%) of respondents say supply challenges have been worse than they expected, and nearly two thirds (63%) say most supplies have arrived on time. Although the vast majority (95%) of deliveries have been missing products, well over half (60%) say these have been at (47%) or below (13%) the level they expected.

 

CGA and Prestige’s survey also indicates that one in five (20%) respondents saw prices rise over the summer. Increases have been particularly apparent in fruit and vegetables, where double the average (40%) think price performance is worse than pre-lockdown. Significant numbers have also experienced price rises in meat and poultry (27%), fish and seafood (25%) and dairy (33%), while beverage categories have remained more stable.

 

David Read, Founder & Chairman of Prestige Purchasing said: “We should not view these problems as a failure within our supply community. They simply highlight the enormous challenges that the pandemic has brought to the whole value chain. The frequent and sudden changes to social restrictions and the complexity of regionality have reduced demand planning to educated guesswork. Social distancing and partial closures have dramatically reduced drop-size, disrupting route planning and making deliveries less economic.”

CGA Client Director Food and Retail Fiona Speakman said: “These figures show the massive impact of the pandemic and lockdowns across the hospitality supply chain. Suppliers are working in exceptionally difficult circumstances, and many operators have been grateful for their support and hard work in responding to issues that are completely beyond their control.

As we enter the crucial Christmas trading period, suppliers and operators alike will be hoping for a strong end to a very tough year. But with the end of the UK’s transition from the EU rapidly approaching, another daunting round of supply challenges may now be looming.”

The survey from CGA and Prestige Purchasing was conducted in October 2020.  For more information, email Fiona Speakman, Client Director – Food & Retail at Fiona.speakman@cga.co.uk.

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