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Foodservice inflation a positive sign for operators: analyst
However, prices are still rising compared to 2023.
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.
According to Shaun Allen, Prestige Purchasing CEO, the slowdown is a positive sign for operators but notes that prices are still rising compared to last year.
“Whilst inflation is easing, we remain in a period of unprecedented foodservice price increases. 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,” Shaun Allen, Prestige Purchasing CEO, said
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.
Whilst 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.
Meanwhile, James Ashurst, client director at CGA by NIQ said that whilst it is 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. More government support, including a rethink on import and admin issues, would be welcome,” Ashurst said.
