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Inflation Figures Brings Light Relief for Hospitality Sector

  • Writer: ETC Finance
    ETC Finance
  • Dec 17, 2025
  • 2 min read

Today, 17 December 2025, The newly reported figures on inflation offer some small relief for the hospitality sector. 


At ETC Finance, we are analysing the implications of this situation and how it impacts you. This comes with the expectation of an interest rate cut next week, which should offer some relief to the hospitality sector.


1) Demand & Pricing: Falling inflation helps real incomes, but growth is still fragile


What’s changing:


  • Headline CPI fell to 3.2% in Nov-25; food prices were a major downward driver. Core and services inflation eased too. 


  • GDP is weak and unemployment higher, so consumers are price-sensitive despite improving inflation. 


Implications for hospitality:


  • Volume may stabilise as the cost-of-living squeeze eases, but spend per head remains cautious, especially on discretionary dining.


  •  FY26 outlooks already suggest subdued consumer confidence and sluggish growth in GDP (0.8–1.2%). 


Actions:


  • Menu engineering: push high-margin, value-perceived formats (feast-style sharing, experiential add-ons)


  • Price architecture: keep headline prices competitive, use “good-better-best” bundles and limited-time offers rather than broad reductions.


  • Micro-promotions on lower-inflation categories (bakery/desserts/cereals inputs) where cost pressure has eased. 


2) Food & Beverage Costs: some relief, but volatility persists


What’s changing:


  • Food inflation cooled; The ONS notes downward contributions from grocery categories. 


  • There is still a longer term risk of renewed pressure keeping food inflation higher. 


  • You’ll get near-term cost relief on certain categories.


Actions


  • Category-level re-tenders focusing on SKUs where spot prices softened (bakery/dry goods, selected produce).


  • Dynamic recipes: maintain alternative specs for volatile lines (oils, dairy, proteins).


  • Waste and yield controls: double down on prep yield analytics; lower inflation won’t fully restore margins.


If balancing finances gives you a headache - or you’re struggling to see a brighter future for your hospitality business - please reach out today for a free and confidential, no-commitment chat with one of our financial consultants.


Contact Lana in the first instance:

Lana@etcfinance.co.uk or call: 0207 305 5660 


 
 
 

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