Energy costs swallow kitchen profits

Customers of catering equipment companies will need to grow their sales by 12% over the next five years just to absorb rising energy prices, new figures suggest.

In yet another indication of the opportunity for sales of energy-friendly equipment in the UK market, research undertaken by carbon management specialist Carbon Statement concludes that energy is now the second highest controllable cost factor for foodservice operators after labour.

The latest figures emerged after pub and restaurant groups representing 80% of managed outlets across the UK came together for the first time to benchmark their efficiency on energy consumption.

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Working with Carbon Statement, they have pooled their data in a bid to obtain a clearer picture of how energy usage is impacting profitability.

With energy costs on the increase and environmental taxes eroding margins, the group said that hospitality companies need to do 12% more business over the next five years on a like-for-like basis just to stand still.

Findings from the first benchmark have been stark — the difference between the best and worst performing companies in the sector equated to a 2% difference in operating margins.

Mark Chapman, director of Carbon Statement, said: “Those companies that have started their journey on energy efficiency and are now in a leadership position are outperforming those yet to start, but still too many companies are wasting hard earned profits by not taking energy efficiency seriously.

“The leading companies that prioritise and implement optimisation initiatives invest up to 10% of their annual energy spend every year — and are seeing results. As energy prices continue to rise, efficient operators will continue to enjoy a significant competitive advantage, especially as the sector operates on such slim margins.”

Key aspects for driving performance assessed in the benchmark include the energy saving technologies deployed; board level support; employee engagement in energy saving; and the level of resource and investment committed to reducing energy.

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