Foodservice price inflation falls for 12 months in a row

30-Jul-2024 - Last updated on 30-Jul-2024 at 08:38 GMT

Price fluctuations: Foodservice Price Index shows food inflation has fallen for 12 consecutive months (Credit:Getty/Photo_Concepts)

Foodservice price inflation dropped to 3.6% in the year to June 2024, marking 12 months in a row of falling rates.

The latest Foodservice Price Index (FPI) report from Prestige Purchasing and CGA by NIQ revealed prices saw a 1 percentage point downturn during this period, down from 4.6% in May.

However, the Index also recorded month-on-month inflation of 1.3% in June - after a period of deflation or only fractional inflation.

Future challenges

This was the largest increase in 12 months and a return to similar levels seen five months ago, suggesting while the overall inflationary trend is encouraging, price fluctuations remain a challenge for the foodservice sector.

Prestige Purchasing CEO Shaun Allen said: “While the year-long trend of falling inflation is encouraging, the return to month-on-month increases serves as a reminder that the market remains volatile.

“Operators should remain vigilant and closely monitor price fluctuations to ensure their businesses are well-prepared for any future challenges.”

Of the 10 categories measured in the FPI, only vegetables remained in double-digit inflation—driven primarily by the potato market, where poor weather conditions have impacted 2023 crops and availability leading into the 2024 season.

Volatile prices

Adverse weather also impacted other outdoor vegetables, causing delays in planting and poor availability during the seasonal crossover, pushing up prices for carrots, onions and brassicas.

More positively, two categories of the Index recorded year-on-year deflation to ease pricing pressures.

CGA by NIQ senior insight consultant Reuben Pullan added: “Twelve continuous months of decline in inflation have brought much-needed respite on the cost challenges that have besieged the foodservice sector lately.

“Along with an easing of some other input prices and consumers’ improving spending confidence, it builds optimism for a strong remainder of 2024—but a return to month-on-month inflation warns us that prices are likely to stay volatile for some time to come.”