Foodservice inflation drops to 2.4%

The latest Foodservice Price Index (FPI) report from Prestige Purchasing and CGA by NIQ revealed year-on-year inflation within the sector fell to 2.4% in the 12 months to September, down from 2.8% the previous month​.

Despite marking the 15th consecutive month of decline, the report also highlighted persistent inflationary pressures.

Under pressure ​

Nine out of the 10 categories measured showed month-on-month price increases, signalling the fourth consecutive month of overall month-on-month inflation according to the index.

CGA by NIQ​ senior insight consultant Reuben Pullan said: “After an ongoing stretch of price rises across the hospitality sector, this continued drop in inflation should bring some relief to hospitality venues and consumers alike.

“Although some costs are easing, month-on-month fluctuations indicate that both revenue and margins are likely to remain under pressure through the rest of 2024 and into next year.”
The vegetables category continued to report high inflation, driven in part by ongoing elevated potato prices.

Potential disruptions ​

Meanwhile, the oils and fats category saw the largest month-on-month increase, primarily due to a surge in butter prices. Non-alcoholic beverages were also a significant driver of inflation.

Though the sugar, jam, syrups and chocolate category, along with vegetables, showed the highest year-on-year increases, underscoring the dynamic nature of foodservice inflation and the need for operators to remain vigilant across all categories, CGA said.
Prestige Purchasing CEO Shaun Allen added: “The continued easing of year-on-year inflation is welcome news, but the sustained month-on-month increases across almost all categories highlight the volatility that still exists in the market.

“Operators need to be proactive and adaptable in their procurement strategies, paying close attention to emerging trends and potential disruptions to ensure they remain competitive.”