Food service: When and how much prices will rise – Energy costs and raw materials are thrashing the industry

Food service firms are preparing to raise prices from 5% to 15% on their products, stating that the surge in operating costs due to energy and raw material costs no longer leaves them room to absorb the extra costs.

The wave of the new increases is expected to start from grill houses, with gyros-pita becoming more expensive by 20-50 cents per euro, reaching up to 3.2 euros. After the increase of 12% that had taken place at the end of the summer last year, gyros sold today at 2.6 – 3 euros and the souvlaki (skewered pork) without pita at 1.8 – 1.9 euros.

This means that for a family of four with two small children, a snack with skewers will soon cost from 28 to 31 euros!

Specifically, ordering 6 pitas for 3 -3.2 euros each means 18 – 19.2 euros. If one includes two portions of french fries 5 – 6 euros and 4 soft drinks for 1.2 – 1.4 euros each, a total of 4.8 – 5.6 euros, then the cost reaches 27.8 – 30.8 euros !

Increases in consumer prices are also being planned by pizzerias and bakeries, as in addition to the unbearable energy costs they face additional costs in flour and oils due to the effects of the Russian-Ukrainian conflict. In fact, some individual companies have already raised prices by 10-20% on pizzas, sandwiches and puff pastry.

Unrealistic operating costs

“Now the operating costs are unreal,” says the general manager of the Hellenic Association of Organized Food Service Companies (EPOES) Mr. Giannis Liaros to the Financial Post. “Energy bills have quadrupled,” he said.

But not only those who receive exorbitant electricity bills have a problem, but also those who use LPG. For example, a LPG bottle used to cost 20 euros and now its price has tripled.

At the same time, increases in raw materials are uncontrollable. All the prices of seed oils (sunflower oil, corn oil, soybean oil, palm oil) are rising, say food service entrepreneurs. It is characteristic that a 10 liter bottle of sunflower oil, which cost 15 euros before the war in Ukraine, today has reached 25-26 euros, they report.

At the same time, pitas for souvlakis/gyros have become more expensive by 12% to 30%, while the prices of vegetables, butter, dairy, cheese and sugar have also risen. Also, prices in packaging materials show a significant increase, while an increase in meat is expected.

Rents are also rising

However, the increase in operating costs is not limited to energy and raw materials. High inflation has dragged along the price of rents with the risk of evictions lurking, says Mr. Liaros.

As all business leases are subject to inflation adjustment clauses, costs, especially for high-profile properties, are now skyrocketing.

In this direction, the industry has asked for a “cutter” in rent increases.

The introduction of a 3% ceiling by the State in the indexation of professional rents was requested by the President of EVEA Giannis Bratakos in a letter sent to the competent Ministers of Finance, Christos Staikouras and Development and Investments, Adonis Georgiadis so as to act as a counterweight to the threat of self-sustaining inflation.