Weak pound keeps foodservice price inflation high

By Sophie Witts contact

- Last updated on GMT

Weak pound keeps foodservice price inflation high

Related tags: Inflation

The weakened pound and rising cost of fish saw wholesale foodservice price inflation hit 8.8% in June, according to the CGA Prestige Foodservice Price Index.

The rate is fractionally down on the 9% recorded in May, the highest figure in nearly nine years, but still above historical averages.

The most significantly affected category was fish, where inflation stood at 20.8%, which the report blamed on sea lice problems in Norwegian and Scottish farms and the pressure that the low exchange rates is placing on imported catches.

In ambient hot categories inflation was running at 12% due to rising tea and coffee prices, while fruit – which is particularly vulnerable to changes to exchange rates – stood at 13.6%.

The report said that though there are tentative signs that inflation in some food and drink categories could be starting to ease a little, uncertainty surrounding Brexit negotiations is likely to keep the value of the pound low and general foodservice price inflation high in coming months. 

“These figures confirm the scale of the inflationary pressure brought by Brexit and the impact of the referendum on sterling,” said Graeme Loudon, commercial director at CGA Strategy.

“Alongside other issues like oil prices and supply challenges, particularly in the fish markets, they are forcing businesses in the wholesale foodservice sector to stay on their toes. Operators that can optimise their procurement and pricing strategies and mitigate some of the inflationary factors will be best placed to succeed in the months ahead.”

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

Related topics: Trends & Reports

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