A weak pound and steep rises in the price of fish and coffee is keeping food inflation high, according to the CGA Prestige Foodservice Price Index.
The Foodservice Price Index from Prestige Purchasing and CGA Strategy has revealed that wholesale foodservice prices increased by 5.8% in April, a figure in line with inflation (6%).
For the second consecutive month, April prices were higher year on year across all sub-categories measured by the CGA Prestige Foodservice Price Index.
Factors driving up inflation included the weak pound and pressures on specific food items.
Fish has recently seen a sharp rise (13.4%) caused in part by a sea lice problem and associated treatment costs. Hot beverages have seen a hike of 11%, with coffee prices affected by weak sterling and declining stocks of some bean varieties. The price of bread and cereals has also increased compared to the previous year (2%) due to a tightening supply of wheat.
However, the price of some food items is starting to ease. Fruit saw the smallest increase of any of the Index’s categories at 1.9%. Vegetable price inflation was running at 4.4% in April, a sharp drop on the rate of 10.4% in January. This has been credited to increased UK production and reduced reliance on imports.
Graeme Loudon, commercial director of CGA Strategy, said: “Inflation in foodservice prices continues to run higher than the sector would wish, and the pound’s exchange rate with the euro, dollar and other currencies means imports will continue to be much more costly than in recent years. But with domestic production increasing and some other pressures possibly easing, we can cautiously hope for some respite in key costs in the coming months.”
Christopher Clare, head of consulting and insight at Prestige Purchasing, added: “As the summer kicks in we have started to see some relief in pricing in a few categories. Whilst we would be hard-pushed to describe this as unusual for the time of the year, many of the larger impacts will begin to be factored out of inflation measurements and so, like CGA, we are cautiously optimistic.”
The Foodservice Price Index is produced by procurement and supply chain management company Prestige Purchasing and business intelligence and strategic consultancy provider CGA Strategy, using data drawn from over 50% of the foodservice market and around 7.8m transactions per month.
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