Key takeaways
- UK food and non-alcoholic drink prices rose 4.9% in the year to July 2025, creating sustained pressure on hospitality margins.
- Food prices increased by around 37% over five years to July 2025, so historic menu costing and supplier deals now risk being badly out of date.
- Climate impacts, global conflict, and rising labour and tax costs are converging to push ingredient prices higher and increase volatility.
- Automated cost tracking, live menu profitability, and tighter control of supplier prices give restaurants, pubs, and hotels clearer options to protect margins.
- Jelly provides automated kitchen management tools that help UK hospitality operators monitor costs and protect profit in real time.
The Relentless Climb: Understanding Recent UK Food Price Inflation
The current state of UK food price inflation presents a difficult backdrop for hospitality businesses. Food and non-alcoholic drink prices rose 4.9% in the year to July 2025, marking the fourth consecutive month of increases. This sustained pressure means operators need current cost data, not quarterly or annual snapshots.
Persistent rise: Four consecutive months of inflation
The repeated month-on-month increases signal more than a short-term spike. This pattern points to structural shifts in supply and production that affect planning, stock management, and pricing. Budgets set even six months ago may already understate real ingredient costs.
Long-term impact: A 37% jump over five years
Food prices increased by around 37% over the five years to July 2025, compared with 4.4% over the previous five-year period. This scale of change requires more than annual price reviews. Procurement strategies, supplier mix, and menu engineering now need regular adjustment based on live information.
Key contributing factors driving higher costs
Multiple pressures are feeding into higher food costs:
- Climate impacts in the UK, including drought, are reducing crop yields.
- Extreme weather in other countries is pushing up wholesale prices for products such as coffee beans and cocoa.
- Global events, including the war in Ukraine, continue to disrupt supply chains and shipping.
- Domestic cost increases, such as higher minimum wage and employer National Insurance Contributions since April 2025, are raising production and distribution costs.
Direct impact on hospitality: Erosion of profit margins
Rising costs filter directly through to kitchen profitability. Business owners such as Jane Matthews at The Ice Cream Farm report being “squeezed on all corners”, with higher input costs and customers who are more price-sensitive. Operators need accurate, up-to-date visibility of dish margins to decide when to adjust prices, portion sizes, or recipes. Jelly gives kitchen teams this level of visibility through automated cost tracking and menu analysis.
The Wider Economic Landscape: Challenges for UK Hospitality Beyond Food Prices
Food inflation sits alongside other financial pressures. Higher energy bills, wage costs, and supply chain disruption all affect the cost base for restaurants, pubs, and hotels. Consumer spending habits are also shifting, with some customers cutting back on fast food and casual dining and choosing smaller treats instead. Many operators therefore carry more of the cost increase to stay competitive.
Current market conditions make operational efficiency and cost control critical. Jelly supports this by turning invoice and sales data into clear numbers on spend, wastage, and profitability, so leadership teams can respond with targeted actions rather than broad cuts.
Jelly’s defence strategy: Automating kitchen management against rising costs
Manual cost tracking and spreadsheet-based recipe management struggle to keep up with volatile prices. Jelly automates key back-of-house processes so operators can base decisions on live figures from every site.
Automated invoice scanning: Real-time cost visibility
Jelly digitises each line from supplier invoices and captures quantity, SKU, price, and tax. The platform processes invoices from email or photo and updates ingredient costs in real time. Teams therefore see price changes within hours of an invoice arriving, not weeks later when management reports are produced.
Live dish costing and price alerts: Proactive margin protection
The Price Alert feature flags ingredient price changes automatically, giving Head Chefs evidence to query increases with suppliers. Costing a dish takes minutes, not half an hour, because every new invoice updates recipe costs and gross profit margins in the background. Colour-coded GP indicators highlight dishes that fall below target so menus can be adjusted quickly.
Real-time profitability: Strategic menu optimisation
Jelly integrates with POS systems to show live gross profit margins for every dish and every site. Operators can see which items generate the strongest contribution and which ones no longer justify their menu space. Ruth Seggie, Owner of The Howard Arms, reported GP rising to 80% after using Jelly to refine her menu and pricing based on this data.
Accounting integration: Streamlining back-of-house administration
Digitised invoices flow directly into accounting tools such as Xero. Finance managers report saving 10 to 20 hours a week on manual data entry, with fewer errors and faster month-end close. This frees time for forecasting, cashflow management, and scenario planning instead of paperwork.
Actionable steps for UK hospitality: Preparing your kitchen for continued inflation
The Bank of England expects food price inflation to peak at around 5.5% by the end of 2026. Kitchens that adopt structured cost management now will be better placed to handle further volatility.
Audit your current costing methods: Outdated systems vs real-time data
Most growing operators still rely on spreadsheets, manual recipe cards, or occasional stocktakes. These methods provide historic snapshots, not current cost figures. A review of existing processes helps identify where key decisions, such as menu pricing or promotions, rest on out-of-date information.
Review supplier contracts: Data-driven negotiation
Structured supplier reviews become more important when input costs move quickly. Farmers sit at the frontline of extreme weather and supply shocks, and cost increases can take six to 18 months to reach consumers. Detailed price histories from tools like Jelly support fair negotiation, switching of products, or rebalancing of volume across suppliers.
Analyse menu profitability: Granular insight for strategic pricing
Operators need clear visibility of GP for each dish and category. Trends such as rising demand for high-protein meals are increasing beef prices, so dishes that were profitable in 2024 or early 2025 may now fall below target GP. Live margin data supports decisions such as re-specifying ingredients, adjusting portion sizes, or repositioning high-cost items on the menu.
Streamline back-of-house admin: Reclaiming time and resources
Manual invoice entry, stock counts, and margin calculations consume hours that could be spent on menu development or guest experience. Automation reduces repetitive tasks and makes it easier to roll out consistent standards across multiple sites.
Empower your kitchen team: Tools for cost-effective management
Chefs and managers need accurate numbers to control spend while maintaining quality. Accessible software, clear dashboards, and simple workflows help teams act on cost information rather than feeling constrained by it. Book a chat to see how Jelly can support your kitchen team with practical cost and margin tools.
Frequently asked questions: Your food price inflation queries answered
How quickly can I see the impact of rising food prices on my menu profitability?
Jelly updates dish costs as soon as new invoices are processed, so you see the impact of price changes in near real time. GP margins refresh automatically, and dishes that fall below target stand out clearly for review.
Can Jelly help me negotiate better prices with my suppliers?
Jelly records every price movement by product and supplier. This history gives you specific data to reference during discussions, supports requests for credits where errors occur, and highlights where alternative products may offer better value.
Is Jelly complex to set up and use for my kitchen team?
Jelly is built for quick onboarding. Teams can start by forwarding existing supplier invoices to a dedicated address and then log in to view spend, ingredient prices, and alerts. Most users gain useful insight within the first week, without extensive training.
What if I have multiple locations? Does Jelly scale effectively?
Jelly suits multi-site operations as well as single venues. The platform gives a central view of costs, GP, and supplier performance across all locations while still allowing site-level detail. Leadership can compare sites, spot outliers, and apply best practice consistently.
How does Jelly integrate with my existing POS and accounting systems?
Jelly connects with popular POS systems such as Square and ePOSnow to combine sales and cost data into clear margin reports. For finance teams, one-click export sends digitised invoices into accounting tools like Xero, reducing double entry and improving accuracy.
Conclusion: Secure your margins in the face of rising food costs with Jelly
Continued UK food price inflation in 2026 creates lasting pressure on restaurants, pubs, and hotels, but it also highlights the value of precise cost control. Operators that track ingredient prices, dish margins, and supplier performance in real time can respond earlier and with more confidence.
Businesses that invest in automated back-of-house systems now are better placed to manage future volatility than those relying on manual processes. Proactive, data-led decisions on menus, pricing, and purchasing are becoming essential parts of hospitality management.
See how Jelly can automate your kitchen management and give you clearer control of your food costs. Book a chat today to explore practical ways to protect your margins.