Challenges remain despite continued easing of foodservice price inflation

By James McAllister

- Last updated on GMT

Supply challenges remain despite easing of foodservice price inflation in latest CGA Prestige Foodservice Price Index

Related tags Foodservice price inflation Cga Inflation Foodservice price index Supply chain

The CGA Prestige Foodservice Price Index recorded year-on-year inflation of 12.6% in January — a drop of 1.2 percentage points from December's rate of 13.8%.

It is the seventh successive month-on-month fall in inflation as markets adjust to falling commodity pricing. Foodservice Price Index inflation has now moved down by an average of 1.4% a month since June 2023, with expectations of further falls ahead. 

However, year-on-year inflation remains high in most categories, with only the dairy and oils & fats segments below double digits. There is some relief month-on-month, however, with four categories falling in price and only two reporting a rise of more than 1% versus December 2023.

While continued falls in inflation are a positive sign for the industry, concerns remain for pricing over the coming months as farmer protests on the continent and border checks in the UK threaten to add further cost to supply.

The British Government's proposal mandating the labelling of all meat and dairy products for exclusive consumption within the UK, and not for consumption within the EU, has been criticised by industry bodies, as it will result in increased food expenses, negatively impact exports and discourage investments in domestic food manufacturing— all of which are expected to increase food and beverage pricing in the UK.
“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,” says Shaun Allen, Prestige Purchasing CEO.

“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.”

With the figures coming ahead of this week's Budget, James Ashurst, client director at CGA by NIQ, adds that more Government support related to the ongoing supply pressures, including a rethink on import and admin issues, would be welcome.

He says: “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.”

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