Research for CGA’s Christmas Report showed almost three quarters (70%) of consumers visit a restaurant in December, with 64% using pubs and a fifth (23%) visiting bars.
Separately, the monthly Foodservice Price Index from CGA and Prestige Purchasing also reported problems with production this year has accelerated inflation in the turkey market in particular.
It said many UK and European producers recorded failing profits in 2018, and French companies, which supply a large proportion of the hatching eggs used by UK breeders, say high temperatures in the summer have led to eggs being lost at a much higher rate than usual.
Substantial reductions
Decisions by some producers to switch from turkey to chicken sheds has also led to substantial reductions in supply and, as a result, higher prices.
Major challenges in the pork market are expected to increase the cost of Christmas ham products. This was down to an outbreak of African swine flu sweeping across Asia and parts of Europe – which is predicted to result in the culling of a quarter of all pigs across the globe – and the pressure on supply means the prices of whole pigs rose by more than 10% between March and October.
Vegetable supply has also been hit by wet weather and floods recently, impacting final harvests of potatoes and other seasonal vegetables, including cauliflower and cabbage.
With the UK self-sufficient in fresh potatoes, this is likely to cause lower output and, therefore, could increase prices in the lead-up to the peak Christmas season. Brussels spouts harvests are being similarly impacted.
Relentless rise
CGA client director of food and retail Fiona Speakman said: “Our index has shown a pretty relentless rise in food and drink inflation for the past three years and, with such pressures on businesses throughout the foodservice supply chain, it is inevitable that cost increases reach consumers too.
“While some competition between retailers may help to soften the inflation, many people will find the cost of their Christmas shopping trolleys will put a bit of a dent in their overall festive spending.”
Prestige Purchasing CEO Shaun Allen predicted meats, other than turkey and ham, could see a rise in demand.
He said: “This is an expensive time of year for consumers so the increasing costs on a number of traditional Christmas items will be extremely unwelcome and will put pressure on margins for operators and retailers in order to keep the costs down for customers over the festive period.
“With turkey and ham prices on the rise, demand for alternative meats such as beef could see a surge this Christmas.”
