Food costs hit 45-year high despite inflation rate decline
Figures released today (Wednesday 19 April) by the Office For National Statistics (ONS) revealed inflation rates rose by 10.1% in the 12 months to March 2023, down from 10.4% in February.
The ease to the headline rate of inflation was partially offset by upward contributions from food and non-alcoholic beverage costs, where prices rose by 19.2%, the highest annual rate for more than 45-years, compared with 18.2% previously.
UKHospitality (UKH) chief executive Kate Nicholls said: “It’s becoming increasingly concerning that we’re not seeing inflation decrease as quickly as many hoped, particularly when business costs are experiencing inflation far higher than the 10.1% released today.
Unsustainable
“We saw just last week that food service price inflation remains over 20% and new research shows the price pubs paid for food rose three times quicker than their menu prices.
“Hospitality businesses are doing all they can to shield consumers from price rises, which means they’ve absorbed as much cost as they can, but that is becoming unsustainable for many.”
The biggest upward contribution to food costs came from breads and cereals, with other smaller effects from fruit, confectionary and meat, partly offset by a downward movement from oils and fats, where the annual rate slowed from 32.1% to 25.6%.
Nicholls added: “Our sector can help the Government achieve its aims of halving inflation if it is given a helping hand to ease recruitment challenges and energy suppliers are reigned in so energy costs are able to fall.
Power of hospitality
“I would strongly urge it to do so and harness the power of hospitality to create employment and economic growth and reduce inflation.”
Night-Time Industries Association (NTIA) CEO Michael Kill concurred while inflation had eased, trading conditions had not, urging it was “important” Government considered “immediate measures” to secure businesses at the “sharpest end” of the crisis.
He said: “Inflation remains above 10%, slowing from 10.4% in February to 10.1%, but feedback from members businesses is that trading conditions have not eased, and many are struggling to survive over the next few months.
“There is no consideration for the immediate issues faced by the sector, with a willingness or an acceptance that a proportion of businesses will fail, as collateral damage due to the crisis.
“This is not something we can accept, and we continue to pressure Government on the immediate issue of untenable operating costs, and in particular the devastating impact of Energy costs across the sector.”
