How Food Vendors Can Navigate Rising Cost

Omolabake Fasogbon

Agriculture stakeholders in the country recently, projected a new wave of food price increase by mid-2025, following increased food imports in 2024.

The implication of this development can be best imagined on not just consumers, but restaurant operators across all tiers, who are yet to rebound from the effects of overarching economic policies that that have made edibles a luxury.

Already, across the country, there have been reports of low patronage of ready to eat food both in local streets buka and established food brands. 

Operators blame this trend on skyrocketing food inflation that followed the economic policies of present administration which impacted prices of raw staples, consequently, a raised price in final menu. 

In a recent report published by the National Bureau of Statistics (NBS), average price of food in the county rose by 97 percent year-on-year from November 2023 to 2024.

This development has forced many Nigerians to adjust to cooking their meals, once they found out that eating satisfactorily in a restaurant has become a utopian quest, unless they will be spending a fortune.

For instance, Mr. Segun Audu works with one of the new generation banks in Victoria Island, Lagos. Before now, he used to patronise one of the popular quick-service restaurants for brunch and lunch. Later on as prices rose, he and his colleagues scouted and located a local restaurant operator, better known as ‘mama put’ whose menu items relatively sold cheaper. Before long, Audu started packing his food from home to the office, citing how even mama put food was no longer sustaining, except he spends far above his budget. 

“I could not cope with buying food again after mama put’ started selling in portions, where a tiny spoon costs N300. To feel satisfied, I need at least 7 portions, along with other items to balance the meal. This means I’d be spending like N5,000 at a sitting, and if I eat twice a day, that’s N10,000. Doing this daily will tell on my take home, and certainly affect other household expenses”, he said. 

Audu’s decision like many others, on the other hand, translates to profit stagnation for operators, and in extreme cases, business exit. 

This has been the frustration of a number of food vendors, amid fluctuations and uncertainty that define the economy. 

A local buka operator at Agege, Lagos, Mrs Funmi Ogunyemi, who used to cook a half bag of rice in a day, now struggles to retail a quarter bag within same period without grappling unsold stock. 

She said, “It’s been really tough lately as we battle to stay afloat. By the time we calculate prices of rice, pepper, oil, even workers and rent, amongst others, it’s not possible we retain old prices except we are merely operating as charity. Our customers are priced out, and it’s heartbreaking seeing fewer people walk in everyday.   I no longer cook the usual quantity I used to. The battle for survival has been real, I am seriously considering selling other items, alongside food to gain some financial stability”. 

 Amid challenges, some players are thriving, which the DMD of Chicken Republic, owned by Food Concept,  Ibikunle Oriola, credited to innovation and sacrifice. 

He affirmed the challenge of drop in sales cut across, affecting both the underdog and the incumbent, while he highlighted some strategies to break even. 

These tactics listed below, according to him have kept his employer, Chicken Republic on track so far: 

 Give Back to Customers

In times of rising food inflation, one effective strategy for food vendors is to give back to customers and show empathy by sharing in their struggles. This can take the form of loyalty discounts, occasional free add-ons, or community support initiatives. Such gestures build customer loyalty and trust which can drive repeat business even when times are tough. This can also be a free powerful marketing tool. 

 Share Burden with Customers

Rather than passing the full brunt of economic situation onto customers through sharp price increases, vendors can absorb part of the cost themselves to keep their offerings accessible. While this might tighten margins in the short term, maintaining customer volume and goodwill can ensure long-term profitability. This balancing act reflects a deeper financial strategy where short-term sacrifices help preserve a stable customer base, thereby reducing the risk of business downturn due to customer attrition.

 Prepay Suppliers to Hedge Price Hikes

 Adjusting working capital strategies is another critical move. Vendors can opt to pay ahead for supplies when prices are stable or expected to rise, locking in lower costs and safeguarding themselves from future spikes. This proactive approach to managing supplier relationships and payments ensures that sudden inflation does not disrupt their ability to deliver consistent quality or pricing. It’s a strategic deployment of capital that creates financial insulation and stability.

 Manage Input Cost

Food vendors can actively manage the cost of their inputs. This involves renegotiating with suppliers, finding alternative sources, or even tweaking menus to feature more affordable ingredients. Such moves ensure that rising costs are dealt with intelligently rather than reflexively transferring the impact to customers. 

Buy Staples in Bulk

Bulk purchases often come with discounts, and when timed correctly, they can shield vendors from immediate cost hikes. While this requires more upfront capital, it is a prudent investment that reduces unit cost and helps maintain margins. Proper storage and inventory management are however key here. 

Diversify for Scale       

By expanding product range or services, such as offering catering, delivery, or branching into related food items, players can spread fixed costs across more revenue streams. Diversification also taps into new customer segments, which not only boosts revenue but provides a buffer against inflation’s impact on any single offering. For instance, Chicken Republic’s launch of Pie Express, a small pastry shop often located outside its main outlet, is a diversification move of the organization to reach broader market segment and boost customer volume.