Rising Costs Hit UK Restaurants as they Suffer ‘Lunchflation’, Research Reveals

New data in the UK has revealed a trend of “lunchflation:” lunch item costs are rising fast across the UK, with prices jumping 3% year over year. This analysis has been carried out by Square, the globally trusted software, payments and hardware solution for businesses of all sizes.

As workers across the UK continue to return to the office after two years of remote work, Square analysed sales across the nation of popular lunchtime meals to understand how much consumers can expect to pay, post-pandemic.

Square’s data has further broken down the new trend of “lunchflation,” pulling out Brits’ favourite lunchtime items that have soared in price:
• Soups lead the way, with the average price up 36% year over year as of March 1st 2022
• Salads come in at a close second, up 34% year over year
• Bread-based items are also on the up – burgers have increased by 28%, wraps are up 21% and sandwiches are up 20% year over year
• Traditional British pies have decreased over the past year but are still 13% above pre-pandemic prices

“Restaurants have been among the hardest-hit businesses in the UK and across the world over the past few years,” said Kaushalya Somasundaram, Head of UK Payments Partnerships and Industry Relations at Square. “The increased price of lunch is due to the rising costs faced by restaurants, who’ve seen everything from staff salaries to ingredients become more expensive. To combat these challenges, restaurants can enlist features like online ordering, self-serve ordering through QR codes, and delivery through third-party partners. All of these operational efficiencies will enable businesses to cut costs and pass savings onto customers.”

Nationally, the share of classic lunch items that were ordered in-person hasn’t returned to pre-pandemic levels, as consumers have had to pivot to placing orders online for delivery and pick-up. Despite this, a growing share of lunch item orders are being placed in-person this year as of March 1st, 2022 – highlighting the need for businesses to offer customers flexibility in how they order across online and in-person.

“In addition to being upfront and honest about why prices have changed, restaurants can lean on inventory management software to combat supply chain woes” said Bryan Solar, Head of Restaurants at Square. “Restaurants that also offer different ways of ordering, like tableside QR codes and pre-ordering online, can maximise sales by meeting customers’ preferences in how they purchase and pick up their items in cost effective ways.”