Foodservice inflations falls for 13th month in a row
The latest Foodservice Price Index (FPI) report showed rates had dropped to 3.1% in July, marking the 13th month in a row the figure has fallen.
However, the report also indicated a slight uptick in month-on-month prices, with items having increased by 0.2% from June.
This was largely driven by the beverage categories measured in the index, which have consistently risen since March this year, contributing to year-on-year inflation of 7.3% in the mineral waters, soft drinks & juices segment, and 4.7% in the tea, coffee & cocoa category.
Challenges and pressures
CGA by NIQ senior insight consultant Reuben Pullan said: “After two years of relentless price rises, this further drop in inflation brings more relief to hospitality venues and consumers alike.
“With energy costs easing too, the tight squeeze on operators’ margins and people’s spending may finally be loosening.
“However, while businesses can now plan with greater certainty, macroeconomic challenges and pressures in key areas of food and drink mean there is no room for complacency.”
On the food side, two of the index’s eight categories recorded a year-on-year decrease in July, with dairy and oils & fats down by -0.1% and -1.7% respectively.
Fluctuating market
In contrast, the vegetables and sugar, jam, syrups & chocolate segments saw sharp rises of 9.6% and 8.4% respectively, with high inflation in the vegetables category predominantly driven by potato pricing.
Reports also suggested that English white potatoes were up around 90% year-on-year as a result of 2023’s challenging harvest. However, if the 2024 harvest progresses without climatic interruptions, price spikes are unlikely to repeat.
Prestige Purchasing CEO Shaun Allen said: “The sustained year-on-year decline in foodservice inflation is encouraging, but the slight month-on-month increase and the significant inflation in certain categories, particularly beverages and vegetables, remind us that the journey towards price stability is ongoing.
“Operators should remain vigilant and proactively manage their procurement strategies to navigate the fluctuating market conditions.”
