Foodservice prices dip 0.1% in May as fresh produce and dairy costs ease

Vegetable prices eased as growing conditions improved.

UK food and drink prices in the hospitality sector fell 0.1% month-on-month in May, according to the latest Foodservice Price Index from CGA by NIQ and Prestige Purchasing, following an uptick in inflation in April.

The decline was driven largely by fresh produce, dairy, and oils. Vegetable prices continued to fall as peak European growing conditions improved the supply of salads and leafy crops.

Milk, cheese, and egg prices also eased, supported by strong domestic milk production and retail competition, while oils and fats softened alongside weaker global demand for palm and soybean oil.

Other categories remained inflationary. Soft drinks, jam, syrups, and chocolate were affected by pressures in global sugar markets, including firmer crude oil prices and a larger share of Brazil's sugarcane crop being diverted to ethanol production.

Coffee, tea, and cocoa prices also rose, driven by irregular rainfall and low stock levels in Brazil and Vietnam, whilst fish prices stayed elevated due to North Atlantic quota restrictions and high operational costs.

Shaun Allen, CEO of Prestige Purchasing, said the monthly drop offers "a welcome, albeit slight, reprieve for hospitality operators," but warned that elevated global energy markets continue to affect sugar and beverage costs, and that structural supply issues persist in fish and coffee. He said extreme weather in major growing regions remains the biggest risk heading into summer trading.

Reuben Pullan, senior insight consultant at NIQ, said sustained deflation "seems unlikely" given ongoing commodity volatility, adding that many hospitality businesses remain financially fragile as they await clarity from the government on industry support in the second half of 2026.