Foodservice price inflation spikes over festive season

Food and drink prices in hospitality rose by 1.1% in December, according to the latest edition of the Foodservice Price Index from Prestige Purchasing and CGA by NIQ.

This sharp upward month-on-month movement marks significant acceleration in inflation to close the year, following a 0.3% fall in October 2025. The uptick was driven by high demand for many items in the run-up to Christmas, as well as persistent supply-side constraints.

The Index recorded steep increases in prices in several high-volume categories. They included milk, cheese and eggs, which recorded the highest rise at 1.9%, as domestic price pressures intensified despite continued softening in global dairy commodity markets. Disruptions related to avian flu reinforced volatility in egg supply chains, compounding costs during a peak usage period.

Fruit prices rose nearly as fast, at 1.8% in December, as markets shifted to higher-cost glasshouse production for soft fruits, and yields of Spanish citrus were significantly reduced. Inflationary momentum also remained critically high in coffee, tea and cocoa. Coffee markets continued to trade near multi-year peaks due to adverse weather in Brazil and Vietnam, while cocoa prices were close to record levels, driven by weak West African harvests and tight inventories.

In meat and poultry, inflation accelerated to 1.5%, as strong seasonal demand collided with structural challenges. Beef traded at historically strong levels due to tight domestic availability, while poultry markets were volatile due to disruptions to supply from avian flu.

Prices also rose in categories including oils and fats and sugar, jam, syrups and chocolate, highlighting a broad-based inflationary environment where domestic energy, labour and logistics costs are limiting the pass-through of any softening in global commodities.

Shaun Allen, CEO of Prestige Purchasing, said: “The 1.1% month-on-month surge in December was a stark reminder of the volatility that continues to plague the supply chain. While global indices for sugar and vegetable oils showed signs of easing in 2025, the reality for UK operators was very different. Acute supply shocks – from avian flu in poultry and eggs to climate-driven shortages in coffee and cocoa – combined with high domestic operational costs to drive prices up significantly just as the sector needed stability the most.”

Reuben Pullan, senior insight consultant in the hospitality operators and food team at NIQ, added: “Another spike in pricing was an unwelcome end to a tough year of trading for hospitality. Coming alongside sharp rises in other areas, food and drink inflation is piling yet more pressure on operators’ profitability, while forced menu rises are impacting the spending confidence of their guests. This remains a resilient and dynamic sector with lots to look forward to in 2026, but businesses will be keeping everything crossed for relief on inflation and key costs in the months ahead.”

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.