Thu 30th Nov 2023 - Falling foodservice price inflation ‘now a clear trend’ Falling foodservice price inflation ‘now a clear trend’: Inflation, as measured by the CGA Prestige Foodservice Price Index (FPI), decreased for the fifth consecutive month in October, dipping below 20% year-on-year at 16.7%, its lowest level since August 2022. There remains, however, a marked contrast between FPI and the measure of supermarket pricing (CPI), which is now rising at roughly half the rate (8.5%) year-on-year. October also marked the first month-on-month fall in the FPI since September 2021. In October, the FPI saw just one category (oils and fats) perform below 10% inflation at 4.0%, but this was in stark contrast to vegetables, where inflation remained extremely high at 30%. Overall, inflation within the FPI has fallen 6.2 percentage points since its peak of 22.9% (year on year) in December 2022. The UN FAO Food Commodity Index (the overall measure of international food commodity prices) averaged 120.6 points in October, down 0.7 points (0.5%) from September, continuing the downward trend and standing 14.8 points (10.9% below its corresponding value a year ago. Brent Crude has eased after a September spike in price. Further inflationary pressure may be felt in the months ahead as sterling has been weaker since the summer against both the dollar and the euro, while UK wage inflation remains around 8%, acting as a brake on the rate of inflation reduction. Shaun Allen, Prestige Purchasing chief executive, said: “The FPI has risen by 40% over the past 24 months, and with inflation still at 16.7%, the compound effects of these continued high numbers need to be carefully monitored and managed. As of today, the journey down to normal levels of inflation (about 1% to 3%) is only about one-third complete.” James Ashurst, client director at CGA by NIQ, added: “The downward movement in foodservice price inflation is starting to build momentum, and we can be optimistic that pressures will ease further for businesses and consumers alike in 2024. Nevertheless, rates remain very high and continue to put strain on prices and profits. The long-term outlook for those in the foodservice chain remains good, but we are not out of the woods yet.”