Hospitality food and drink price inflation eases as seasonal supply improves

Food and drink prices in hospitality fell by 0.3% in October 2025, according to the latest Foodservice Price Index from CGA by NIQ and Prestige Purchasing.

It is the first downward movement in trends after six consecutive months of rising costs, ahead of the festive trading period. However, despite the dip, there remains significant volatility across several key food and drink categories.

Vegetables proved to be the largest faller, where prices dropped by -1.7% year-on-year in October, the Index measured. This decline reflects improved seasonal supply compared to 2024, supported by better crop emergence and completed plantings across the UK.

However, the outlook remains mixed, with potato yields varying significantly between Scotland and England due to prolonged heat, and brassica sizes remaining small and making winter availability dependent on improved rainfall.

Inflation eased in October in the milk, cheese and eggs category, where prices fell 1.5% month-on-month. This reflects a softening in global dairy markets, with declines in whole milk powder and cheese quotations.

Conversely, the meat and poultry category moved in the opposite direction, with prices rising +0.7%. While global meat indices have shown some easing, UK poultry markets face severe volatility due to renewed Avian Flu outbreaks. Unprecedented 30-day export bans on major turkey suppliers are creating acute shortages and record-high spot prices just as festive demand accelerates.

Shaun Allen, CEO of Prestige Purchasing, said: “The slight decline in the FPI to 150.6 offers a welcome, albeit temporary, respite for operators after six months of consistent month-on-month inflation.

“However, the market remains incredibly fragile. With Avian Flu disrupting poultry supply during the crucial festive period and structural costs like energy and labour remaining high, this month’s easing should be viewed with caution. Operators must remain agile in their sourcing strategies to navigate the volatility expected through winter.”

Reuben Pullan, senior insight consultant at CGA by NIQ, added: “As hospitality begins the crucial run-in to Christmas, news of an easing in inflation is a welcome development.

“Nevertheless, months of increases have taken a heavy toll on businesses, and there are plenty of warning signs to suggest this will be temporary respite rather than a turning of the tide. Put alongside ongoing caution in consumer spending, it means hospitality operators will have to be at the top of their game to sustain sales and protect margins over the festive season.”

Food benchmarking service Quenelles analysed that the cost of serving a traditional Christmas dinner has soared by a third in the past five years for caterers.

Meanwhile, purchasing specialist Lynx Purchasing recently predicted that beef, fish, coffee and cocoa prices will remain high for hospitality buyers in the coming months.