Food price inflation showed a softening in September following rampant price rises throughout the first eight months of the year.
Wholesale foodservice inflation dipped to 6.5% last month, following a 9.3% year on year rise in August, according to the latest edition of the CGA Prestige Foodservice Price Index. It is the lowest figure recorded by the Index since April.
However, many categories of the market are continuing to experience volatility in prices. Inflation was in double figures for oils and fats, because of challenging olive and sunflower oil supplies; and mineral waters, soft drinks and juices, due to high fruit juice prices and transportation costs.
Inflation is showing signs of easing in vegetables, with an improvement in domestic production, while sugar, where the removal of quotas has ramped up supply, has led to year-on-year deflation of 7.6%.
The data suggests that the impacts of the weakening of the pound since the EU referendum may now be settling in some food categories, though there are ongoing concerns around global supply and the uncertainty of the Brexit negotiations.
The Index now forecasts inflation of 3.8% for the next 12 months.
Christopher Clare, head of consulting & insight at Prestige Purchasing, said: “The easing in overall inflation means a respite for many businesses where commercial pressures have been rising – not just in input prices but also through the impact of business rates and slowing sales as consumers tighten their purses in the tougher economic conditions.
“Whilst food prices are not yet falling, we are optimistic that we have seen the bulk of any broad increases coming through.”
CGA commercial director Graeme Loudon added: “Our latest Foodservice Price Index reveals some grounds for hope that inflation levels may now start to ease a little, and that would provide the sector with some very welcome stability. But with economic factors, supply issues and Brexit all contributing to price volatility, any optimism about a long-term easing of inflation must be tempered with a high degree of caution.”
The CGA Prestige Foodservice Price Index is produced by Prestige Purchasing and CGA, using data drawn from over 50% of the foodservice market and around 7.8 million transactions per month.