It is impossible to have any discussion about hospitality at the moment without it drifting towards the topic of energy.
At last week’s Ceda Conference, operators both big and small provided a pretty stark account of the decisions they face as they contemplate how to navigate the ominous cost landscape ahead.
All through the summer we heard warnings from foodservice operators that their very survival was at stake after being quoted eye-watering tariffs from energy companies in the UK.
The Energy Bill Relief Scheme has at least provided some assistance and clarity at a time when most were feeling utterly helpless.
Not since furlough two years ago has government intervention on a crisis been so eagerly anticipated by the hospitality sector.
Critics will point out that the scheme is currently only in place for six months and rightly ask what happens after we have got through the winter? Not even the government seems to know the answer to that one right now, but UKHospitality has at least confirmed it is working with officials to ensure there is no “cliff edge” when the measures fall away.
The trade body’s own research underscores the severity of the issue. More than 70% of businesses said they were expecting to see their bills more than double, while nearly 30% were due to be hit with rises of over 300%.
Average energy costs as a percentage of turnover have jumped from 5% in 2019 to 18% today.
Energy bills used to be the fifth largest cost to businesses – it is now the second, accounting for a greater proportion of turnover than rent and rates combined.
Given such data, it is easy to understand why suppliers of energy efficient catering equipment might be feeling pretty confident about their prospects right now.
Any operator that has merely paid lip service to greener equipment in the past surely can’t turn a blind eye to it now, can they?
Generally speaking, it is fair to say that running costs and energy usage have ascended operators’ list of priorities at a pace far quicker than we have ever known before.
Serious operators can no longer afford to dismiss it as a factor that they don’t need to really worry about.
The point, however, (and the reason for my headline) is that it doesn’t automatically mean that operators will be clambering over each other to get hold of green kit.
As many dealers I have spoken to recently point out, there are other dynamics to consider here.
The most notable of these is whether operators have sufficient access to capital in the first place, as well as a strong enough incentive to want to buy superior equipment over a cheaper, shorter-term alternative.
Providing a discount on energy bills is a life-saving measure in some instances, but it doesn’t solve the bigger issue here when it comes to equipment replacement.
Without these elements being properly addressed, there is a very real danger that many operators (particularly smaller ones) simply get trapped in a vicious cycle that prevents them ever having the means or financial resource to be able to source better equipment that will give them genuine ROI, even if it takes a little longer for that to materialise than they would normally plan for.
The state has shown it is willing to intervene when the situation is perilous. Perhaps it needs to take a more active role in looking at the tools and mechanisms that would really move the needle on greener operator buying habits.