Foodservice price inflation drops 20%

It showed that inflation dipped below 20% year-on-year at 16.7% - its lowest level since August 2022.

However, a contrast between FPI inflation and the measure of supermarket pricing (CPI) which is now rising at roughly half the rate (8.5%) year-on-year.

Prestige Purchasing chief executive Shaun Allen said: “The Foodservice Price Index has risen by 40% over the past 24 months, and with inflation still at 16.7% the compound effects of these continued high numbers need to be carefully monitored and managed. As of today, the journey down to normal levels of inflation (about 1% to 3%) is only about one-third complete.”

October also marked the first month-on-month fall in FPI since September 2021.

In October, FPI saw just one category (oils & fats) perform below 10% inflation at 4%, but this was in stark contrast to vegetables where inflation remained very high at 30%.

Overall, inflation within FPI has fallen 6.2% since its peak of 22.9% year-on-year in December 2022.

The UN FAO Food Commodity Index (the overall measure of international food commodity prices) averaged 120.6 point in October, down 0.7 points from September, continuing the downward trend and standing 10.9% below its corresponding value a year ago.

CGA by NIQ client director James Ashurst said: “The downward movement in foodservice price inflation is starting to build momentum, and we can optimistic that pressures will ease further for businesses and consumers alike in 2024.

“Nevertheless, rates remain very high and continue to put strain on prices and profits. The long-term outlook for those in the foodservice chain remains good, but we are not out of the woods yet.”

The Foodservice Price Index is created using foodservice data drawn from 7.8m transactions per month.