Restaurants, pubs and hotels at front line of rising food inflation

By Emma Eversham contact

- Last updated on GMT

Foodservice operators should expect to see higher prices for supplies as food inflation grows, experts warn
Foodservice operators should expect to see higher prices for supplies as food inflation grows, experts warn

Related tags: Consumer price index

Foodservice operators are on the front line of rising food inflation as they face paying 2 per cent more for supplies than they did last year, according to supply chain management company Prestige Purchasing. 

While the latest Consumer Price Index (CPI) figures indicate prices more than 2 per cent lower than last year, Prestige Purchasing and CGA Strategy's own Foodservice Price Index (FPI) has found that the foodservice sector is actually being faced with a 2 per cent rise. 

“Despite what CPI is showing, we’re seeing a noticeable rise in inflation for foodservice operators, and the widening gap between CPI and FPI is one of the many huge challenges operators are facing," said Prestige Purchasing chief executive David Read, whose FPI has analysed over four million lines of data points a month to create a more accurate picture for foodservice businesses.

"While consumers are protected somewhat by the continued supermarket price wars, political and agricultural supply issues have led to a ‘perfect storm’ which are driving prices up."

Supply and demand

Restaurant, pub and hotel owners have already been warned to expect price rises for certain types of produce where supplies have not been able to meet demand, such as avocados, salmon, chocolate and coffee. Imported alcohol is also proving more expensive because of the falling pound. 

Last month purchasing company Beacon also warned operators to expect prices rises of 15 per cent for prawns due to increased pressure on supply and extreme global weather conditions. 

Prestige Purchasing advises caterers to check contracts with suppliers and review any clauses that benchmark budgets to CPI to help counteract the price rises. 

"Our message to those that do have these clauses, is to review them immediately and link them to the true cost of supply for operators," said Read. 

Phil Tate, chief executive of CGA Strategy, said: “It is a turbulent time in food pricing, and we are pleased to offer operators some practical help.

"With so many macro and micro economic factors impacting on the food supply chain at the moment, there are significant issues for both supply - and consumer-side pricing - but smart operators will find ways to mitigate the extra costs and grow their market share."

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