Food inflation eases as retail prices fall
The CGA Prestige Foodservice Price Index fell marginally to 21.7%
Inflation measured by the CGA Prestige Foodservice Price Index fell marginally to 21.7% year-on-year in July, just below the Index’s previous peak of 22.9% in December 2022.
According to CGA by NIQ’s report, some signs of foodservice prices starting to ease are showing.
The fish category recorded a 0.8% fall—its first month-on-month (MoM) drop since July 2022. Dairy prices remained stable, and the MoM increase in the vegetables category slowed by half, from 3.2% in June to 1.6% in July.
Whilst the cost of global food commodities increased by 1.3% in July, the UN FAO Commodity Index remains 11.8% below its value in the corresponding month in 2022. Brent crude oil prices and major currency rates remained stable throughout July. However, inflation is falling more slowly in the category of food products, where processed items dominate and manufacturers remain exposed to high inflationary inputs including energy and labour. Many of these products are also imported and have accrued additional costs from post-Brexit trading arrangements.
“Food and drink supply into hospitality has been slower to react to falling input costs than the retail sector. We are confident that over the remainder of the year inflation will begin to ease at our kitchen doors, but both buyers and suppliers will need to play their part in curbing the continually rising costs that threaten the existence of so many of our sector’s brilliant operators,” Shaun Allen, CEO of Prestige Purchasing, said.
“Businesses will be relieved to see a slight easing of inflation in July, and there are some welcome early signs of relief in key spending areas for both operators and consumers. However, with inflation still topping 20%, trading conditions remain extremely challenging. It is especially frustrating at a time when prices are easing in the retail sector, and reinforces the case for targeted government support for hospitality businesses,” James Ashurst, client director at CGA by NIQ said.
