, UK

Food service inflation hits double digits for the fourth consecutive month in May

All food and drink categories posted year-on-year inflation in May 2022.

Inflation in the food and drink segment reached 10% for the fourth successive month in May 2022, the CGA and Prestige Foodservice Price Index showed.

All of the 10 Index’s food and drink sectors posted year-on-year and quarter-on-quarter inflation in May whilst oils and fats with 3.7%, dairy and fruit categories are recording the highest year-on-year increases.

This report also showed key factors causing inflation, including the Russia-Ukraine unrest, and rising costs of energy and supply.

"War in Ukraine has severely disrupted the supply of food staples including grains and oils, and pushed up the costs of production and distribution via higher crude oil prices and restricted gas supply," read the joint statement.

Foodservice is also grappling with wage bills, with UK job vacancies reaching 1.3 million in May whilst several micro supply and demand issues continue to affect prices in many areas.

The report also projects that there is low chance that inflation will go down by 7% until the second quarter of 2023. It is seen to grow in the second half of 2022.

Prestige Purchasing CEO Shaun Allen said: “High levels of inflation are clearly around for the long haul. Our analysis shows that the delta between operators with average versus good market pricing is now over 9%, which is about 3 percentage points of gross margin. Operators would be well advised to invest in skills and resource to manage this volatile environment.”

James Ashurst, client director at CGA of NielsenIQ, said  challenges could "get worse before they get better" amidst the war and rising prices.

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