Food prices set to rise in coming months as pressures on supply chain grow

17 November 2021 by
Food prices set to rise in coming months as pressures on supply chain grow

Supply issues are expected to lead to rising food prices in the run-up to Christmas and into the New Year.

Sharp cost increases over the winter are predicted in the latest edition of the CGA Prestige Foodservice Price Index as a result of rising demand, product shortages and distribution issues.

The return of schools and increasing levels of performance from hospitality, business and industry drove a surge in volumes in the supply chain in September, leading to a sharp increase in product shortages.

Although problems eased slightly over the month and into October, wholesale suppliers are increasingly suffering a shortage of supplies.

The supply chain has faced a chronic shortage of HGV drivers, pickers and manufacturing and production staff, resulting in insufficient stocks in key areas, with post-Brexit difficulties in the importation of goods adding to the shortages.

Shaun Allen, chief executive of procurement company Prestige Purchasing, said: "From a flat September, we expect prices to be up between 3% and 6% year-on-year by the New Year, with an even higher peak thereafter. Operators would be well advised to focus particularly on the weeks commencing 29 November and 6 December, as these are peak volume weeks for our suppliers."

James Ashurst, client director at research consultancy CGA, added: "This autumn may prove to be the calm before the storm in foodservice price inflation. Rising demand, falling supply and distribution issues are straining many areas of the market, and prices will inevitably rise in the months ahead. It is an unwelcome trend for hospitality businesses that are already facing severe operational challenges, and highlights the sector's need for sustained government support in the months ahead."

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking