Foodservice price inflation surges over 20% in November

This marks the 10th month of double-digit inflation.

The CGA Prestige Foodservice Price Index saw a record increase in inflation at 21.5%.

This marks the 10th consecutive month of double-digit inflation and the first time in history that the Index recorded an increase of over 20%.

According to the report by CGA by NielsenIQ, all categories of the Index recorded double-digit inflation with oils & fats reporting a year-on-year (YoY) high of 47%.

“There is some evidence to suggest that the heat may be dissipating in this sector, with month-on-month (Mom) increases moderating from earlier highs. The vegetables category of the Index rose nearly 4% MoM to register year-on-year inflation of 23%,” the report said.

However, major upstream influencers on the price of food, including oil, exchange rates and volatile commodity markets, are now showing some signs of stabilising. The cost of oil fell in November from $93 to $82 per barrel, whilst sterling was stable against the euro and dollar. 

Food commodity markets have eased in recent weeks, with the UN’s FAO Food Price Index virtually unchanged compared to October, and MoM decreases in the price indices for cereals, dairy and meat almost offsetting increases in vegetable oils and sugar.

According to Prestige Purchasing CEO Shaun Allen, they expected inflation to level off in December, gradually declining in the New Year as the impacts of the less challenging upstream influences and YoY effects begin to feed through into the Index. 

“Nevertheless, the average monthly increase in prices during 2022 has been 1.7%, so inflation has a long way to fall before prices (rather than inflation) can start to come down,” Allen said.

Businesses across the industry will be holding their breath for respite in 2023, Allen added.