Foodservice inflation continues to fall but price pressure remains

04 March 2024 by
Foodservice inflation continues to fall but price pressure remains

Foodservice price inflation fell for the seventh successive month in January as commodity pricing eases, though year-on-year inflations remains in double digits for most categories.

The CGA Prestige Foodservice Price Index recorded year-on-year inflation of 12.6% in January, which was down 1.2 percentage points on December.

Further falls are expected in the coming months, though the rate of inflation still remains high with only dairy and oil and fats products dropping below double digit inflation.

There are also concerns that farmers protests in mainland Europe and border checks in the UK will add to costs. Meanwhile, the government's plans for mandatory labelling of meat and dairy products for consumption within the UK, and not the EU, is expected to impact exports and affect domestic manufacturers, putting further pressure on prices.

Prestige Purchasing chief executive Shaun Allen said: "The current falls in inflation are a positive sign for operators; however, it is worth noting that prices are still rising compared to last year, and while inflation is easing, we remain in a period of unprecedented foodservice price increases. It is more pressing than ever for businesses to remain vigilant and assess price changes in their supply chain using good data and market insight."

James Ashurst, client director at CGA by NIQ, added: "While it's encouraging to see a slowdown, proper respite on foodservice price inflation remains a long way off. Supply issues are causing widespread frustration at a time when commodity prices are relaxing and businesses and consumers should be finding the going a little easier. More government support, including a rethink on import and admin issues, would be welcome."

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