The Silent Killer Behind Your Shrinking GPs
The Silent Killer Behind Your Shrinking GPs
Rising costs are a constant challenge for hospitality operators, creating ongoing uncertainty around Gross Profit (GP) margins. Unlike labour costs, food prices are notoriously volatile, changing daily. This unpredictability of food costs is the silent killer behind your shrinking profits.
Between May 2021 and May 2024, food prices surged by 30.6%, according to the House of Commons. Our figures on the wholesale market show the rise is even greater. In this climate, keeping tight control over food costs is not just critical but the difference between surviving and closure.
At Jelly, we’ve partnered with successful independent food businesses from restaurants like Murano and Fallow to pub groups like Publican Pubs and caterers like Social Pantry. Speaking with them, we’ve uncovered some eye-opening insights about managing food costs in 2024.
Are Your Supplier Contracts Really Protecting Your GP?
You may believe your supplier contracts lock in stable prices or discounts, but are you 100% certain this holds true for every product, every order, every day?
Take Vincenzo, the owner of Cucina di Vincenzo in Liverpool. He thought his pricing for staples like Pancetta and Nduja was secure. But in just the first four weeks, their prices fluctuated by 10% on four separate times. That’s 10% on £1k worth of food spent. These changes could easily go unnoticed amid the hundreds of products ordered weekly.
Fortunately, Vincenzo was using Jelly, which provided daily price alerts. His head chef caught the fluctuations in time to secure a credit note and 10% discount on future purchases. Without Jelly tracking these changes, his business could have unknowingly lost tens of thousands of pounds.
It’s not just about catching errors—it’s about consistently protecting your GP from unpredictable supplier price changes
Automate your GP Tracking in Real Time
With food prices changing daily, how confident are you that what you’re selling is still profitable?
Executive Chef Dominic Robinson of Sika Inns (and formerly Claude Bosi at Bibendum) explains the difference Jelly made for him: "Before, I’d wait until the end of the month for my accounting team to provide the figures, then spend weeks trying to figure out where it went wrong. Now, I can adjust instantly."
Jelly’s invoice processing technology automatically updates costs down to the ingredient level, providing real-time price change alerts. This price change also ensures you always know the latest GP of every dish, allowing you to act quickly to maintain strong profits.
A Parting Question
With that, we leave you with a parting question: How many hidden price changes are costing your business without you even realizing it?
—Visit Jelly at stand G48 to try us out, or sign up to access Jelly’s live demo kitchen here.
