Foodservice price inflation increases amid warnings of instability

Foodservice price inflation has once again risen above UK wide levels amid warnings that instability is expected to continue further into 2018. 

The latest CGA Prestige Foodservice Price Index has revealed that foodservice price inflation rose to 5.1% in December, up from its November rate of 3.4%.

November’s rate, the lowest since the start of 2017, had suggested some respite but in light of December’s results CGA and Prestige Purchasing have warned that relief is unlikely in the immediate future.

The index shows that inflation is running high in most of the ten food and beverage categories it sets out, with drivers including an increase in fish demand, a weak sterling, the La Nina weather phenomenon and avian influenza.

Pressure on the UK meat supply has also been exacerbated by the recent Russell Hume controversy, while pricing in the soft drinks sector is experiencing turbulence ahead of the introduction of the “sugar tax” in April.

CGA client director of food, Fiona Speakman said: “After relatively modest inflation in November, December’s Foodservice Price Index returned to the trend of substantial pricing pressure that dominated 2017. With many important areas of the market facing sector-specific challenges and the value of sterling still low, the Index confirms that any lull in inflation is likely to be short-lived.

“For all foodservice businesses, it emphasises the vital importance of staying on top of price trends and setting purchasing strategies accordingly in 2018.”

The CGA Prestige Foodservice Price Index is jointly produced by Prestige Purchasing and CGA, using data drawn from more than 50% of the foodservice market and about 7.8m transactions per month.

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