UKH chief executive Kate Nicholls explained the “series of price increases” faced by the industry would leave many operators with no choice but to increase their prices, jeopardising the Government’s recent pledge to reduce inflation.
This comes as latest figures from the CGA Prestige Foodservice Price Index (FPI) yesterday (Wednesday 25 January) showed double digit inflation for an 11th consecutive month, with the index finishing 2022 at record highs.
Deeper into jeopardy
Nicholls said: “The central food and drink element of hospitality means this level of inflation puts the sector deeper into jeopardy.
“It’s another in a series of price increases across all fronts of operations and businesses will have no choice but to pass it on to customers. That will make it harder for the Government to deliver on its key commitment to reduce inflation across the wider economy.
“This simple economic fact underlines the importance of Government investing in and supporting the sector to help keep our prices as low as possible if they want to achieve their target of halving inflation.”
Injection of support
All 10 categories of the index from CGA by NielsenIQ and Prestige Purchasing recorded inflationary levels of at least 10% in December, though more than half topped 20%, while the oils and fats category led the surge with year-on-year inflation soaring to huge 47% for the category.
Moreover, with energy costs continuing at high levels and a reduction to Government support due to begin in April on top of higher labour costs across supply chains and significant easing in prices only likely to begin with an end to the conflict in Ukraine, the outlook for 2023 remains volatile, according to the index.
Nicholls added: “We recognise public finances are tight, but an injection of support into hospitality can repay the cost many times over through the additional sales it creates, the growth this generates and the jobs it can offer.”
