After hitting a high of 9.3% in August 2017, inflation is expected to ease to 3.4%.
According to Prestige Purchasing’s Annual Food & Drink Inflation Report, restaurant operators and caterers hoping for a return to normal inflation levels in 2018 will be disappointed.
Foodservice supply chain specialist Prestige Purchasing said in a report, "We expect exchange rates and oil prices to remain broadly in line with 2017, but are concerned by heightened risk from labour costs, weather and several specific ingredients where current supply challenges may intensify. As a result, our predictions for Food and Drink inflation in Foodservice show an average of 3.6% during 2018, with December 2018 inflation at 3.4%."
Christopher Clare, Head of Consulting & Insight at Prestige Purchasing explained, “In 2017, we have seen inflation at the kitchen door surge ahead of increases in supermarket prices. By contrast to Foodservice supply, the Retail market for food is highly competitive and supermarket operators have both absorbed increases into margin or delayed and refused increases from producers altogether.”
Shaun Allen, Chief Executive of Prestige Purchasing said, “Looking to 2018 levels of volatility are falling, but we still expect challenges in Seafood – including Tuna, Butter (and Dairy as a whole), Eggs due to Fipronil, and Vegetable Oils. With all the current uncertainty that surrounds our exit from the EU, the year after (2019) still looks a very high-risk year for the cost of food and drink.”
Photo credit: Prestige Purchasing
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