Foodservice inflation hits record 13.6% as supply issues mount: Year-on-year inflation in the foodservice sector hit 13.6% in March 2022, the latest CGA Prestige Foodservice Price Index has revealed. The figure is the highest in the history of the index and continues a surge in prices since the start of the year. It is 3.4 percentage points higher than in February, when year-on-year inflation reached double digits for the first time. By comparison, inflation in March 2021 – when the UK was still under widespread covid restrictions – was just 0.1%. Seven of the ten categories measured by the index were in double-digit inflation in March 2022—and five recorded increases of more than 20%. Prices in the oils and fats category are now more than 50% higher than a year ago, while the bread and cereal segment has increased dramatically too. These and other categories including fish have been heavily impacted by the war in Ukraine, a major supplier of commodities including oil and grain. With shortages likely to continue for some time, further volatility in prices can be expected, the index warned. Russia’s invasion of Ukraine has exacerbated other major inflationary pressures, including the soaring costs of energy, fuel, transportation and labour. High levels of inflation are also being seen in categories of the index including fruit, dairy and soft drinks, while chicken prices are rising sharply too. Prestige Purchasing chief executive Shaun Allen said: “The war between Russia and Ukraine looks likely to push inflation even higher in the coming months. This conflict is truly multidimensional. It’s reduced production levels of food staples such as grain and oil, it’s driven up the cost of distribution by increasing oil prices, and it’s raised the cost of energy by restricting gas supplies. Inflation may calm later in the year, but prices are unlikely to fall for the foreseeable future.”
Spending on both nights in and nights out declines as consumers tighten belts: Spending on both nights in and nights out declined in April compared with March as cost-of-living concerns caused consumers to tighten their belts. According to the latest data from Barclaycard, spending on takeaways and nights out was reduced as growth on fast-food and takeaways (up 77.9% in April on 2019 levels) was lower than the previous month (79.6%), as was spending in bars, pubs and clubs (up 39.2% in April on 2019 levels compared with 41.7% in March). But while inflation and rising living costs are starting to impact hospitality and other sectors, 52% of consumers said they still had the finances to be able to spend on non-essential items, while 67% said they are confident in their ability to live within their means. The proportion of Brits concerned about the impact of higher household bills on their finances remained high at 90%, while optimism about the future of the UK economy fell slightly from 27% in March to 25% in April. This comes as more than a fifth (21%) of Brits said they are making social or holiday plans for the Queen’s Platinum Jubilee next month, with 16% opting for a UK staycation. Almost a fifth (17%) are also spending more on special occasions like weddings and holidays this summer, to make up for lost time over the last two years. Overall, consumer card spending grew 18.1% in April compared with the same period in 2019 – the highest uplift since October 2021 – with the travel sector seeing its best month since before the pandemic. Spending on hotels, resorts and accommodation rose 16.6% compared with three years ago, the category’s highest growth since September last year.