Hospitality food and drink price inflation reaches 15% for the first time
The figure, which marks the seventh consecutive month of double-digit inflation, has been attributed to droughts, the war in Ukraine, and soaring costs of commodities, energy, and labour throughout the supply chain. The decline in the value of sterling will also push up the costs of imports and fuel inflation.
The index has recorded double-digit inflation in every month of 2022 since February, with prices increasing nearly 2% from July alone.
Extremely dry weather in the UK and EU had a severe impact on many crops and pastures - though conditions have been more favourable in recent weeks - and there has also been some easing in commodity markets and oil prices, but with energy pricing remaining uncertain and the Ukraine war continuing, the market is likely to remain volatile for some time.
Every category of the index experienced year-on-year inflation, with two key segments – dairy and oils and fats – surpassing 4% month-on-month. Two categories – fruit and sugars – registered a small fall in prices from July.
“In the months ahead it is likely that we will reach peak inflation, then see some levelling-off, before a gradual fall during next year. But falling inflation does not mean that prices will go down,” says Prestige Purchasing CEO Shaun Allen.
“For at least the full year of 2023 we expect that they will just increase more slowly. With so many other pressures it would be easy for operators to take the eye off the ball of managing supply prices, which in this market could be very costly.”
James Ashurst, client director at CGA, says: “Inflation is having a severe impact on businesses and consumers alike, and foodservice is caught in the eye of a fierce storm. While some pressures may be easing, a tough winter lies ahead.
“The foodservice sector remains a vibrant contributor to the UK economy, but it deserves urgent, targeted and sustained government support to mitigate inflationary challenges and sustain vulnerable businesses.”
