Rising costs hit margins and menu prices as hospitality’s supply issues continue.

The board of Greggs plc has announced that it has appointed Matthew (Matt) Davies as an independent non-executive director and chair designate.

Matt Davies joins their board with immediate eff ect, and will be appointed as chair on 1 November 2022, when the current chair, Ian Durant, will step down.

Matt Davies is a widely experienced retailer, say Greggs, and during his executive career held CEO positions at Tesco UK & Ireland, Pets at Home, and Halfords. As a non-executive director, he chaired N Brown Group plc between 2018 and 2021, and was on the board of Dunelm Group plc between 2012 and 2015. He is also chair of private equity-owned Hobbycraft, and is an operating partner at Advent International.

Ian Durant, chair of Greggs, said: “Greggs has undergone a transformation over the past decade and I am proud to have contributed to its achievements as chair. Greggs has entered a new era, now under Roisin Currie’s leadership, and the business is in great shape with a clear strategy. I welcome Matt Davies as my successor as Chair and wish him well.”

Sandra Turner, senior independent director of Greggs, added: “On behalf of the board I would like to thank Ian for his considerable contribution to the Greggs business over the past 11 years and we all wish him well for the future.”

Matt Davies, chair designate said: “I’m really delighted to be taking on this role. Greggs is a great business and a brand that I have long admired. I’m looking forward to working with the board, Roisin and the senior management team to further develop the business over the coming years.”

Hospitality businesses face a damaging combination of mounting costs and supply problems, market analysts, CGA, and provider of cloud-based cost control solutions, Fourth’s, new Business Confi dence Survey reveals.

Their exclusive survey of industry leaders shows more than two in three (71%) have seen signifi cant increases in energy costs, while six in 10 (60%) have experienced signifi cant food and drink price infl ation. Businesses are also dealing with shortages of key food and drink items, the survey shows. Eight in 10 (81%) have experienced reduced product lines, while more than half have seen products not turning up (62%) or delayed (51%).

With costs of labour and other inputs also squeezing margins, hospitality businesses are being forced to pass on some rises to consumers. Leaders say they have raised menu prices by an average of 9% in the last year, and they plan to raise them by a further 6% in the next 12 months.

Despite the rising costs, hospitality leaders remain focused on making their businesses more sustainable. Half (49%) plan to introduce measures to reduce their carbon footprints, with priorities including reducing energy use or switching to renewable sources, consolidating deliveries, working with greener suppliers, reducing waste and adding more plant-based food to menus.

Sebastien Sepierre, managing director – EMEA, Fourth, said: “The hospitality industry has had a torrid time over the last two and a half years, and the ongoing supply chain disruption is the latest challenge that businesses have had to contend with. Recent data published by Fourth indicates that average overall costs are up 10% on 2019, and that the average gross profi t margin has fallen from 78% to 74% in the last 12 months.

“Leaning on the support of technology and smart solutions is one of the primary ways sector businesses can manage this ongoing crisis. Whether it’s directly comparing suppliers and costs, replenishing inventories, adjusting ingredients in menu items, or simply uncovering what you need and when – smart tech can ease what is continuing to be an extremely tough time for our industry.”

Karl Chessell, CGA’s business unit director - hospitality operators and food, EMEA, added: “The double whammy of cost and availability issues is piling huge pressure on operators’ margins. Combined with the growing cost-of-living crisis for consumers, it means trading conditions will be very tough over the remainder of 2022. Hospitality’s long-term future is bright, but for now leaders will have to fi nd the right balance between absorbing soaring costs and passing them on to guests. The huge supply challenges also highlight the need for urgent and sustained government support for the sector.”