By Rebecca Riezebos
Wholesale foodservice inflation has declined for a second month, reaching 5.8% in October 2017, as input pressures ease slightly.
It is the second month in a row that inflation has decreased after September's inflation dropped to 6.8%, according to the CGA Prestige Foodservice Price Index.
The Index predicted a further easing of pressures into 2018 and forecasts inflation of 4% for the next 12 months.
There has been notable easing of inflation in key categories such as sugar, where due to improved supply there has been a 6.1% drop in prices year on year.
Increased domestic sourcing has also kept down inflation in the meat and vegetable sectors. However in other categories such as fish and oil and fats, inflation is still in double figures.
While there is cautious optimism that the immediate post-Brexit volatility has now filtered through most categories of food and drink and that foodservice inflation will start to settle along with the cost of imports to the UK, the Index reports that uncertainty over Brexit negotiations may still have a negative impact on certain sectors.
A particular concern is the availability of migrant labour for the UK fruit sector where a large number of European Union nationals make up the workforce.
CGA commercial director Graeme Loudon said: "As we near the end of a year of very high inflation in foodservice prices, it is encouraging to see evidence that stresses may be easing."
Christopher Clare, head of consulting and insight at Prestige Purchasing, added: "In a week where the chancellor announced changes to the calculation of business rates, the drop in inflation for product purchases will of course be further welcome news. This might provide some relief for busy operators over the festive season."
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.
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