The latest Foodservice Price Index report from Prestige Purchasing and CGA showed a 2.5 percentage point year-on-year decline in inflation levels for April 2024, continuing a “steady trend towards stability” in pricing.
However, while the overall decline was “welcomed”, the data revealed a more “nuanced picture” across different food categories.
According to the report, only two categories recorded month-on-month deflation, while six others showed inflation rates of 1% or less.
Cautious optimism
In addition, while there was a degree of price stability across most segments, some areas were subject to fluctuation, which has led to the first month-on-month inflation since January, indicating supply issues continue to impact pricing.
Prestige Purchasing CEO Shaun Allen said: “The April Foodservice Price Index report paints a picture of cautious optimism for the industry.
“While some categories are still experiencing price fluctuations, the general trend towards lower inflation rates is a positive sign for the sector’s recovery.
“However, it is important to remain vigilant about the potential impact of external factors, such as weather patterns and global events, which could continue to influence prices in the coming months.”
Vegetables saw the highest month-on-month inflation of the categories measured in the index, with an upswing of 1.4% following extreme weather conditions in the UK and Europe, including one of the wettest winters on record.
Managing costs
The report added tricky weather conditions had “hampered planting and impacted crop yields”, leading to a scarcity of fresh produce and driving up prices for both consumers and businesses.
In March, foodservice price inflation fell below 10% for the first time in two years but remained more than double the level of retail inflation, the previous report showed.
Earlier this week, buying experts Lynx Purchasing also warned of sharp price increases across key food and drink lines due to heavy rain.
CGA by NIQ client director James Ashurst added: “Business across the foodservice sector will be hugely relieved to see some stability in pricing after many months of very high inflation.
“It should give business confidence a much-needed boost, and will hopefully also feed through to increased consumer spending in due course.
“Nevertheless, the supply chain remains vulnerable to micro inflationary pressures, and all hospitality businesses need to continue managing costs very carefully.”
