Food inflation drops to lowest level in over 2 years

May also saw month-on-month deflation of 0.4% – the fourth such decrease in more than two and a half years, according to the latest Foodservice Price Index from Prestige Purchasing and CGA.

The data indicated a sustained return towards pre-pandemic levels of inflation and more closely mirror trends seen for some time in the consumer prices index (CPI).

Furthermore, the basket of prices fell month-on-month in six of the Foodservice Price Index’s 10 categories.

Very welcome​

In fact, the oils and fats category delivered six consecutive months of year-on-year deflation while after more than a year of double-digit year-on-year inflation in most categories, this dropped to just one in May.

In April, the index reported a 2.5 percentage point year-on-year decline​ in inflation levels while March saw the rate drop to under 10%​ for the first time in two years.

On the latest figures, Prestige Purchasing CEO Shaun Allen said: “This fall of input inflation is very welcome, as the full basket of CPI has also fallen sharply to 2% year on year and diners will soon come to expect stable pricing again in our restaurants.

“Buyers should be particularly wary of proposed supplier increases in this period of sharply falling inflation.”

General stability​

Following several years of relentlessly high inflation, the data showed some very welcome respite, CGA by NIQ senior insight consultant Reuben Pullan said.

He added: “While some rates remain higher than businesses would like, the general stability makes it much easier to plan for the future.

“In turn it should also reassure consumers, who have seen food and drink menu prices rise sharply but will hopefully become more confident with their spending as we move towards the second half of the year.”