Foodservice price inflation hits 15% for the first time

07 October 2022 by
Foodservice price inflation hits 15% for the first time

Food and drink price inflation in hospitality hit 15% for the first time in the history of the CGA Prestige Foodservice Price Index in August, the latest data shows.

The research said droughts, the war in Ukraine and the spiralling costs of commodities, energy and labour throughout the supply chain all contributed to the record high.

The Index has now recorded double-digit inflation in every month of 2022 since February, with prices increasing nearly 2% from July alone.

Every category on the index experienced year-on-year inflation, with dairy and oils and fats prices rising 4% month-on-month. Only fruit and sugars saw a small drop in prices from July.

Very dry weather in the UK and European Union had a severe impact on many crops and pastures in August, though conditions have since improved.

There has also been some easing in commodity markets and the price of oil, but the tracker said the market is likely to remain volatile for some time.

Falls in the value of sterling will also push up the cost of imports and fuel inflation.

Shaun Allen, chief executive of Prestige Purchasing, said: "In the months ahead it is likely that we will reach peak inflation, then see some levelling-off, before a gradual fall during next year. But falling inflation does not mean that prices will go down.

"For at least the full year of 2023 we expect that they will just increase more slowly. With so many other pressures it would be easy for operators to take the eye off the ball of managing supply prices, which in this market could be very costly."

James Ashurst, client director at CGA by NielsenIQ, said foodservice was caught "in the eye of a fierce storm".

He added: "While some pressures may be easing, a tough winter lies ahead. The foodservice sector remains a vibrant contributor to the UK economy, but it deserves urgent, targeted and sustained government support to mitigate inflationary challenges and sustain vulnerable businesses."

Photo: Prarinya/Shutterstock

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