Inflation “steady” as food and drink supply disruptions hit reopening: analysts
CGA and Prestige’s Foodservice Price Index predicts more price increases in the months ahead.
Food and drink supply has been hit by “widespread” distribution problems and a spike in demand following the return of out-of-home dining, according to the new edition of the CGA Prestige Foodservice Price Index.
The companies said June saw supply issues in the south of England, amplified by warm weather, and were compounded by a shortage of labour, particularly HGV drivers, as well as insufficient manufactured stocks and Brexit-related challenges with imported goods.
Many suppliers were said to have put mitigation strategies in place, including the refusal of some orders to cap demand and improvements to wages and conditions to attract new employees. The situation has stabilized in July, the Index said, but demand is “likely to peak” again in early September when schools and businesses increase order levels.
Food inflation stood at 1.6% in June and non-alcoholic beverage prices increased month-on-month but remain below 2020 levels.
CGA and Prestige Purchasing say the remaining months of 2021 are likely to see further increases in the level of food inflation, as sector demand returns towards pre-pandemic normality and extra supply costs and wage inflation feed into price increases.
