Fish, bread and dairy price inflation falls

By Sophie Witts contact

- Last updated on GMT

UK Foodservice price inflation falls in 2018

Related tags: Inflation

Foodservice price inflation fell to 2.5% in January 2018 - the lowest figure since early last year - according to the CGA Prestige Foodservice Price Index.

It marks a drop on the 5.1% rate recorded in December 2017, which CGA says indicates some of the inflammatory pressures hitting the industry over the last two years may be easing.

There was a year-on-year drop in key categories such as bread and cereals (-2.3%), and milk, cheese and eggs (-0.2%).

Fish prices also fell 2.6% year-on-year after months of high inflation, which reached 23% in August 2017.

The figures put the foodservice sector broadly in line with the wider level of UK inflation, as measured by the Consumer Price Index.

The number of restaurant businesses going insolvent in England and Wales​ rose by 20% between September 2016-17, and the teams behind many recent closures have cited rising ingredient and staffing costs as hitting their bottom line.

The CGA Prestige report warns that the impact of Brexit on migrant labour - which the vegetable, fruit, fish and meat processing sectors heavily rely on - could place further pressure on inflation in 2018 and beyond.

The long-term impact of the recent cold weather on farmers and supply chains is also yet to be determined.

“January’s headline inflation rate of 2.5% will be welcomed by the industry, and it is a relief to see foodservice come into line with CPI inflation," says CGA client director of food Fiona Speakman.

“But it should be remembered that some of the pressures pushing down inflation are seasonal, and with factors like Brexit still causing uncertainty, businesses will have to monitor price trends and purchasing very closely throughout 2018.”

The CGA Prestige Foodservice Price Index is jointly produced by Prestige Purchasing and CGA, 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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