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Tue 8th Nov 2022 - Foodservice inflation hits record high of 18.8%
Foodservice inflation hits record high of 18.8%: Inflation in food and drink prices hit a record high of 18.8% in September, the latest CGA Prestige Foodservice Price Index reveals. After reaching 15% for first time in August, the Index surged again during September. This means inflation has been in double digits in every month of 2022 since January. Year-on-year price rises topped 10% in every food category of the September index, with dairy and oils and fats the most inflationary segments. Other core products for hospitality, including meat, vegetables and fruit, were all above 17%, with total food prices climbing 2.9% since August alone. Food inflation is also rising fast in the retail sector, and the food category of the Consumer Price Index passed 10% for the first time in September, with fresh food climbing 13.3%. The rate of general inflation across the wider economy and the impact of steady hikes in interest rates on consumers’ spending on eating out, are also causing significant concerns among hospitality operators and suppliers. The report, from CGA and Prestige Purchasing, predicts inflation will continue to be high. While food commodity markets have shown some signs of easing in recent weeks, OPEC’s reduction of oil production and the continued vulnerability of the Black Sea grain corridor deal with Russia are among the factors placing upwards pressure on pricing. Prestige Purchasing chief executive Shaun Allen said: “The speed of price rises from suppliers to the hospitality sector continues to increase, and there is little that we can see in the months ahead that will change that. Inflation has well and truly taken root in our supply chains, and while we do expect prices to rise more slowly in 2023, we believe we will still be seeing significant levels of inflation for most of next year.” James Ashurst, client director at CGA by NielsenIQ, added: “Britain’s best restaurants, pubs and bars still have a bright future, but thousands of businesses weakened by two years of covid-19 are now extremely fragile. Government support is desperately needed to sustain them through this storm.”

Restaurant spending falls 11.3% in October as more consumers cut back: Restaurant spending fell 11.3% year-on-year in October as more consumers cut back in response to the cost-of-living crisis, according to the latest data from Barclaycard. Of the half of Brits (52%) who are cutting back on discretionary purchases to afford their energy bills this autumn and winter, six in ten (62%) said they are spending less on eating out at restaurants and 37% are buying fewer cinema tickets. Bars, pubs and clubs, however, saw slight year-on-year growth of 1.7%, though prior to September, this would have been the smallest growth for the category since March last year. Takeaways and fast-food spending grew 11.7% as half of consumers (50%) are swapping nights out for evenings in to save money this autumn and winter. The hospitality and leisure sector saw year-on-year growth of 10.2%, but this was the smallest uplift for the category since March 2021. With the festive season fast approaching, almost half (48%) of Brits are planning to cut down on Christmas purchases, including festive activities and gifts, to save money this year. Of these, two fifths (42%) will curb their spending on Christmas parties and socialising. Overall, consumer card spending grew 3.5% year-on-year in October – higher than in September (1.8%) but well below the 8.8% in consumer price inflation. Supermarket shopping grew 4.6%, 1.8 percentage points higher than last month (2.8%), as the cost of food continued to rise. Against a backdrop of political and economic uncertainty, confidence in the UK economy fell sharply to 15% – the lowest level recorded since 2015, when Barclaycard began tracking this data, and less than half the level this time last year (31%). Meanwhile, 92% are worried about the negative impact of rising inflation on their personal finances, with 30% of Brits assessing whether every individual purchase is necessary.

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