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Morning Briefing for pub, restaurant and food wervice operators

Fri 7th Oct 2022 - Foodservice inflation tops 15% for first time
Foodservice inflation tops 15% for 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 has shown. Droughts, the war in Ukraine and 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 almost 2% from July alone. Every category of the index experienced year-on-year inflation, with two key segments – dairy, and oils and fats – surpassing 4% month-on-month. Only two – fruit and sugar – registered a small fall in prices from July. Very dry weather in the UK and European Union had a severe impact on many crops and pastures, though conditions have been more favourable in recent weeks. There has also been some easing in commodity markets and the price of oil, but with energy pricing very uncertain and the Ukraine war continuing, the market is likely to remain volatile for some time, the index said. Steep falls in the value of sterling will also push up the cost of imports and fuel inflation. Prestige Purchasing chief executive Shaun Allen said: “In the months ahead it is likely 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 they will just increase more slowly.” James Ashurst, client director at CGA by NielsenIQ, 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.”

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