High food and drink inflation extending into 2023, study warns
The latest CGA and Prestige Foodservice Price Index shows a third consecutive month of double-digit inflation.
Foodservice prices in April were 10% higher than the same month last year due to high energy costs and unstable global supply, the latest edition of the Foodservice Price Index from CGA and Prestige Purchasing showed.
It is the third month of double-digit inflation in a row, with analysis by the research agencies suggesting volatility in supply and costs is likely to fuel high food and drink prices “for some time.”
The report predicts that further rises in inflation are possible this year, and that the rate is “unlikely” to fall below 7% until at least 2023.
Russia’s invasion of Ukraine led to inflationary pressures being exacerbated in recent months, with the crisis having reduced the production levels of food staples including grains and oils, and driven up energy and fuel costs by increasing oil prices and restricting gas supplies.
Nine of the ten food and drink categories measured by the Index recorded inflation in April 2022, seven of which reaching double-digits, and three exceeding 20%.
“Simply acceding to price increases will not be an acceptable option for many operators, so actively managing supply increases using reliable market data is essential. This is also a good time to review menu/ingredient ranges, and supply models to ensure optimum margin in the months ahead,” Prestige Purchasing CEO Shaun Allen said.
James Ashurst, client director at CGA, added: “Soaring prices are also starting to affect consumers’ spending, and on top of global supply issues and the after-shocks of COVID and Brexit, the outlook for the rest of 2022 is extremely challenging.”