Foodservice price inflation drops 22% in January

This is the first decline since September 2021.

The CGA Prestige Foodservice Price Index (FPI) has revealed a slight drop in foodservice price inflation in January, with the index decreasing to 22% from December's record high of 22.9%. This marks the first decline in inflation since September 2021.

Despite the decrease, all categories of the Index remain in double-digit inflation, with Oils & Fats seeing the highest year-on-year increase at 42.2%. Milk, Cheese, and Eggs also continue to rise quickly at 37.7%, whilst vegetable prices have increased month-on-month by more than 3.5% for three consecutive months.

Whilst the three major upstream influencers on the price of food, including oil, exchange rates, and commodity markets, are now more stable than in 2022, energy costs remain at extremely high levels, and higher labour costs within supply chains show few signs of easing.

"A fall in the level of inflation is welcome news, and even if it is a small one, it is an encouraging reminder that price increases are at last beginning to slow down. We expect to see inflation easing slowly over the course of 2023 as commodity pricing and prior year impacts kick in," Shaun Allen, CEO of Prestige Purchasing, said

James Ashurst, client director at CGA by NielsenIQ, emphasised the need for targeted government support to sustain businesses through these challenges. "The foodservice sector has been battered by inflation for a long time now, and on top of the disruption triggered by COVID, it has left some businesses extremely fragile."

The FPI is developed specifically for the foodservice and catering sector and contains insights and analysis from over 10.7 million lines of data each month. Whilst the drop in inflation is an encouraging start to the year, the outlook for 2023 remains volatile, with the end to conflict in Ukraine being a significant factor in any potential reduction in food and drink prices.