The local hospitality sector is in a dilemma as the galloping prices of food stuffs continue to mount pressure on businesses and threatening their survival.
The development, The Guardian gathered, is forcing operators to either close shop, or hike prices, rack up losses or cut corners.

The latest report by the National Bureau of Statistics (NBS) pegged inflation at 34.19 per cent, while food inflation hits 40.87 per cent in June. The World Bank Report, which was updated this month, revealed that Nigeria ranks first together with Malawi on the top 10 African countries with the worst food inflation mid-way into 2024.

Another report from the African Development Bank (AfDB) affirmed that Nigeria was the fourth African country with the highest inflation rate. Nigeria’s organised fast-food industry was estimated at $602.5 million and has been growing at a 10 per cent yearly rate from past years.

The country’s hospitality industry was also projected to be the fastest-growing market with a 12.0 per cent compound yearly increase. Unfortunately, the worsening inflationary food trend has put these projections and possible success boom to doubt.

Some industry participants shared their ordeals, their coping mechanisms, and solutions to the seemingly insurmountable crisis. A caterer, Dorcas Lawal, said that the increase in foodstuffs has affected those who sell food to earn a living and the increase in fuel price has added more sorrow.

Lawal said: “Things are so costly, and in this country once something is affected definitely it will affect all. Without food, there won’t be life, and it has affected us adversely.”

She further explained that though most caterers buy foodstuffs at a very high price, but they are usually reluctant to sell them at a high rate, so as to retain patronage of customers, which leads to lower income.

“We cook in low quantities because people no longer eat to be full but just to have something in their stomach to avoid any sickness. So, we decrease the amount of food we cook, automatically it will affect our profit.

“We have to find alternatives due to the increase in the pepper price, so many food vendors couldn’t stay on their former standards, which lead to change in taste, and once there’s a change in taste, there would be a low patronage,” she said.

Professional baker, Olakale Eniola, said that the galloping price of baking materials has made it difficult to keep up with customers’ demands. She had to increase the price of her goods but customers keep complaining, especially because of their low purchasing power.

“For now, I buy ingredients in small quantities to cope, to keep the business going but due to the diversity of people that patronise me, including Nigerians and those visiting the country, I make sure I keep the standard, even though it’s biting at the moment.

“The government should find an immediate solution to these problems for us to survive. The hospitality industry is facing undue pressures due to the food inflation. We that are in the business know how agonising it is,” Eniola said.

Executive Chef and General Managing Director at the Chefs Culinary Arts Port-Harcourt, Joy Onwumere, added that the inflation rate has caused instability in food prices and a sharp rise in the food price within a short time.

“As it stands right now, service rates to customers cannot be evaluated any more at a short term and even the medium term. This has led to a very erratic pricing and a lot of people that are into the business are opting out. Many businesses are closing down because they can’t keep up with the standard of the food prices,” she said.

Onwumere blamed the government for the challenges, though advised that the borders should be opened to enable importation of foodstuffs. She said that the government should focus on mechanised farming, creating more industries for production, providing loans for farmers and addressing insecurity to ensure the safety and growth of the agricultural sector.

The culinary expert also buttressed on policies to make food easily transported to the desired market at reduced cost.

“I encourage every individual and family to go into farming even planting in buckets would go a long way. It has helped me survive in my business. Even small-scale farmers can plant vegetables and maize to feed people. Stakeholders should create more farm clubs to educate young minds about farming as a formidable business venture,” she said.

Hospitality and Customer Experience Consultant, Funke Olusoga-Ogunlade, reckoned that the food inflation has amplified existing challenges, and introduced new ones in the hospitality industry, most especially the food and beverage divisions.

She said that rising food prices have significantly increased operating costs for hotels, restaurants, and catering services, affecting profitability and customer satisfaction.

Also, menu price adjustments have been necessary to keep up with ingredient costs, leading to supply chain disruptions.

“To reduce costs and dependency on volatile exchange rates, hospitality businesses should consider local sourcing of ingredients, adjusting quality and service, carving a niche, and educating staff on cost-saving practices. This can help stabilise prices and establish business relationships with local farmers. Emphasising best-selling, cost-effective menu items can also attract a target audience,” she said.