Foodservice price inflation eases for the 19th consecutive month
Month-on-month inflation was flat at 0%.
Foodservice price inflation, as measured by the CGA Prestige Foodservice Price Index, fell by the 19th consecutive months; however, analysts warn that global economic and political uncertainties may threaten the stability of prices in the months ahead.
Monthly inflation in the total basket of items measured by the Index stood at 1.8%, whilst month-on-month (MoM) inflation was flat at 0.0%.
Of the Index’s 10 categories, only fish recorded year-on-year (YoY) deflation and just three delivered MoM deflation. Beef prices have continued to surge to record levels, driven by projections of strong demand and lower production in 2025. There are some pockets of relief, including the start of a decrease in olive oil prices after record highs in recent years.
Other persisting pressures on global commodity markets are likely to impact food and drink prices. Notably, aluminium prices have surged 17.9% over the six months to January 2025, following increased demand from China, rising energy costs, supply chain disruptions and escalating fears of a global trade war.
The recent imposition of a 25% US import tariff on aluminium adds further uncertainty. CGA by NIQ said that while it remains too early to fully assess the tariff's impact, it has the potential to disrupt global supply chains and create further price volatility, with unpredictable knock-on consequences for the foodservice sector.
Crude oil prices also saw a substantial +11.4% MoM increase, driven by geopolitical tensions, delays in OPEC+ production increases and heightened demand. Natural gas prices also continued their upward trend, rising +4.7% month-on-month.
“While the overall Foodservice Price Index indicates a continued low level of inflation, the pressure on some key commodities such as beef, energy and crude oil together with the pending cost impacts from the NMW increases and NICS changes are likely to see inflation rise up again over the coming months,” Shaun Allen, CEO of Prestige Purchasing said.
“Nineteen months of downward movement in inflation has been welcome respite for businesses in the foodservice chain besieged by cost pressures. However, there is no room for complacency, especially as global trade tensions rise. While there are positive signs, the outlook for hospitality remains cautious given the ongoing global trade tensions and rising costs. With other costs like labour and energy rising and many consumers still hesitant about spending, the trading environment will be difficult for some time to come,” Reuben Pullan, senior insight consultant at CGA by NIQ, said.
