Food inflation falls to 12.6%
It is the seventh successive month-on-month fall in inflation as markets adjust to falling commodity pricing.
Foodservice Price Index inflation has now moved down by an average of 1.4% a month since June 2023, with expectations of further falls ahead.
Prestige Purchasing chief executive Shaun Allen said: “The current falls in inflation are a positive sign for operators; however, it is worth noting that prices are still rising compared to last year, and while inflation is easing, we remain in a period of unprecedented foodservice price increases.
“It is more pressing than ever for businesses to remain vigilant and assess price changes in their supply chain using good data and market insight.”
Data analysis
However, year-on-year inflation remains high in most categories, with only the dairy and oils & fats segments below double digits.
There is some relief month-on-month however, with four categories falling in price and only two reporting a rise in more than 1% versus December 2023.
While continued falls in inflation are appositive sign for the industry, concerns remain for pricing over the coming months as farmer protests across Europe and border checks in the UK threaten to add further cost to supply.
CGA by NIQ client director James Ashurst said: “While it’s encouraging to see a slowdown, proper respite on foodservice price inflation remains a long way off."
Supply issues
He added: “Supply issues are causing widespread frustration at a time when commodity prices are relaxing, and businesses and consumers should be finding the going a little easier.
“More government support, including a rethink on import and admin issues, would be welcome.”
The Government’s proposal mandating the labelling of all meat and dairy products for exclusive consumption within the UK, and not for consumption within the EU, has been criticised b industry bodies.
This is because it is likely to cause a hike in food expenses, negatively impact exports and discourage investments in domestic food manufacturing, all of which are expected to increase food & drink pricing in the UK.
