Margin · 6 min read

The 2 points of GP you're losing without noticing.

Nobody queries an invoice because a case of tomatoes went up 4p. That is precisely why price creep is the most expensive problem in most restaurant kitchens — it never arrives as a decision you get to make.

Here is the arithmetic that makes it worth your attention. A venue turning over £20,000 a week at 68% gross profit buys around £6,400 of food and drink. If supplier prices drift upward by 3% and nobody catches it, that is roughly £190 a week, or just under £10,000 a year, leaving the business permanently.

It does not feel like £10,000. It feels like nothing at all, because it arrives as a few pence on a few hundred lines, spread across a dozen suppliers, on invoices that all look completely normal.

Why the P&L tells you too late

Most operators find out from their gross profit percentage, and by then months have passed. Worse, the monthly figure is noisy enough to hide it. A two-point GP drop in a single month gets attributed to a quiet week, a staff meal that wasn't recorded, a stocktake timing difference, or a big function that skewed the mix.

All of those explanations are plausible. Some of them are even true. That is the difficulty: by the time the pattern is unambiguous in the accounts, the money has been gone for a quarter.

Price creep is not a negotiation problem. It is a matching problem — and matching is a process, not a conversation.

Where it actually comes from

In our experience it is rarely one supplier behaving badly. It is usually four things happening quietly at once.

  • Agreed prices that were never written down. A price was quoted when the account opened, confirmed verbally, and has since drifted with nothing to check it against.
  • Substitutions at a different price. The order was for one product, something comparable arrived, and it was invoiced at the substitute's price without anybody flagging the change.
  • Short deliveries billed in full. Someone signed the delivery note at 6am during a service prep. Three items were missing. The credit was promised and never issued.
  • Seasonal rises that never come back down. A genuine cost increase in January is entirely fair. It stops being fair in June, when the underlying cost has fallen and the price has not.

Each of these is defensible in isolation. Together, they are where your two points went.

What catching it actually requires

The fix is unglamorous: check every invoice line against what you agreed to pay and what actually arrived, before you pay it. Three sources have to agree — the order, the delivery, and the invoice.

  1. Maintain a price file. Every supplier, every line, the agreed price and the date it was agreed. Without this you have nothing to check against, and every conversation becomes one person's memory against another's.
  2. Check the invoice against the delivery, not the order. What you ordered is an intention. What arrived is a fact, and it is the only thing you should be paying for.
  3. Raise queries before payment, not after. A query raised while the invoice is unpaid gets resolved. A query raised after payment becomes a request for a credit note, which is a different and much slower conversation.
  4. Track promised credits until they land. A credit agreed on the phone is not money. A credit note in your ledger is money.

The timing matters as much as the checking. This is the reason our payment run sits where it does in the month: statements in by the 3rd, everything reconciled against the inventory system, queries raised by the 10th, payment on the 15th. That gap between raising a query and paying is what gives it leverage.

What good looks like

When this is working properly, three things change. Your gross profit stops moving for reasons nobody can explain. Your suppliers get noticeably more careful with their pricing, because they know it is being checked. And the conversation with them shifts from arguing about last month to agreeing next quarter.

That last one is the underrated benefit. A supplier who knows you check every line is not an adversary — they are simply a supplier who prices you accurately, which is all you wanted.

Most operators we speak to suspect this is happening but have no way of proving it. If that sounds familiar, the fastest way to find out is to take one month of invoices from your largest supplier and check them line by line against what you believe you agreed. It takes an afternoon, and the answer is usually uncomfortable.

Want us to run that check on your numbers? Book a 30-min demo →
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