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

Food inflation expected to be 0% for 2016

16 December 2015 by
Food inflation expected to be 0% for 2016

Food prices are expected to remain broadly flat in 2016 with food inflation at 0%, according to procurement specialist Prestige Purchasing, as part of its Annual Food Inflation Report.

The report shows food inflation has remained negative for the second consecutive year, but foodservice price deflation has been slower than the retail market.

It said the sharper fall for the retail market had been caused by supermarkets being forced to be more aggressive on price in order to drive volume.

Prestige Purchasing placed headline food inflation for 2015 at -3.1% based on data from the Office of National Statistics.

The Foodservice Price Index, which was used to produce the report, placed food and drink deflation for the foodservice sector at -1% for 2015.

These headline inflation figures are in contrast to last year's forecasts, where inflation was expected to return to positive figures.

However, factors such as the strengthening of the Pound, the Russian ban on EU food products and falling oil prices has put downward pressure on prices.

David Read, chief executive of Prestige Purchasing, said: "The foodservice market hasn't been exposed to the same market dynamics and this has led to a widening gap between foodservice prices and retail prices."

Different food categories are expected to rise and fall at different rates. The largest price movements this year were seen in fish (up 5.9%) and dairy (down 4.7%), with notable movements downward in meat and oils & fats.

Read added: "The outlook for food inflation in the year ahead is likely to be relatively benign." But he warned operators should remain cautious of outside factors which could change the picture dramatically. He cited the EU referendum as a particular example, which could lead to an impact on food prices.


Food prices fall in 2014 for first time since 2000 >>

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.

close

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