Why are cooking oil prices rising?
Everyone has noticed a dramatic jump in the cost of their weekly food shop. But where some food items remain at a reasonable cost, others have sky-rocketed, such as cooking oil. The BBC states that vegetable oil has seen a huge 65% price increase in just one year, leaving households and businesses alike to adapt and seek out cheaper cooking alternatives.
Where this is slightly easier for domestic households, switching to budget supermarkets in a bid to save some cash, it’s not as straightforward for business owners in the food and drink industry. They face a dilemma whereby if they are forced to pay increased cooking oil prices, they’ll have to up the cost of their food and drink, which could put customers off if it’s raised too sharply.
However, if they don’t raise their prices enough, they could end up losing out on much-needed profit. So why has the price of cooking oil risen so much in the last year and what are business owners doing to offset it?
Supply chain issues & climate change are partly to blame
Inflation could also be contributing factor
An article by the BBC states that inflation could be another reason for the rise in cooking oil prices. At the start of the year, housing, bills and food were the top three everyday costs that were set to face a considerable rise as a result of exponential inflation hikes, the likes of which haven’t been seen since 1982.
Also within the aforementioned article, it was reported that Kelly Hill, a hairdresser from Stafford, had to move back in with her parents in order to save money, claiming that they used to do their food shopping in Tesco before noticing a considerable jump in the cost of their weekly shop. They’ve made the shift to Aldi in the meantime, with it being increasingly unlikely that they’ll go back to the supermarket giant. But it’s not just domestic customers who are noticing a difference and having to make cuts and changes in the home to save money.
How have rising cooking oil prices affected businesses?
According to an article published by the BBC, throughout the summer of 2022 chefs and restaurant owners alike were forced to adapt their cooking styles and dishes so as to conserve their cooking oil supply. The owners and chef of the Cadeleigh Arms in Devon stated that the price of their olive oil had risen by a whopping 50%, forcing him instead to use cheaper alternatives, like rapeseed oil.
However, because of the swap, he’s had to take menu items down, such as dressed salads, as they require quality olive oil. The same article also detailed the struggles faced by another pub owner in Wingham, Kent, also commented on how the price of cooking oil has left him with few alternatives. It’s becoming increasingly more difficult for him to absorb the inflated price of cooking oil, forcing him to also remove popular dishes from their sterling menu.
This is a trend that shows no signs of stopping. Grant Fitzner, chief economist for the ONS, warned that business prices are remaining high overall.