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Latest edition of the CGA Prestige Foodservice Price Index forecasts further increases driven by the weak pound and worldwide supply issues
Foodservice price inflation rose to 3.7% in February, the latest edition of the CGA Prestige Foodservice Price Index reveals—and further increases are likely to follow in the next few months.
It continues an upswing in wholesale foodservice prices, following year-on-year increases of 1.8% in December and 2.9% in January. It further widens the gap between inflation in the sector and inflation experienced by the public, as measured by the Consumer Price Index. Month-on-month inflation from January to February was 0.6%, higher than seasonal averages.
Rising foodservice inflation has been the result of a combination of factors, including lower than usual supply of key items and the weak pound. Of the ten sub-categories measured by Prestige Purchasing and CGA Strategy, nine saw higher prices year on year. Areas that have experienced particularly high inflation include:
- Fish, with prices up over 8% on February 2016 following poor cod catches, increased demand from China and sea lice problems for salmon producers.
- Sugar, chocolate and other confectionery, with prices noticeably higher as supply of cane sugar into the UK has reduced. Volatility in sugar has also led to an increase in soft drinks prices of over 6%
- Vegetables, with prices up significantly as poor weather conditions have hampered production in key regions of Europe.
With the exchange rate for sterling likely to remain low, the Foodservice Price Index forecasts more increases in inflation between now and late summer, with rates well above seasonal averages. However, there are indications that pressures may ease a little towards the end of 2017, with the recent fall in oil prices a welcome development.
Christopher Clare, Head of Consulting & Insight at Prestige Purchasing, said: “Inflationary pressure looks set to continue, with our FPI forward forecasts showing we might just hit 5% in the next couple of months. We are in for a continued period of volatile pricing and operators will find that their supply chain is demanding extra focus and that good data is key.”
Phil Tate, Chief Executive of CGA Strategy, said: “Our latest Foodservice Price Index reveals no respite in inflationary trends. The moderate to steep rises in nearly all categories are placing unwelcome pressure on businesses in the foodservice supply chain, and with sterling continuing to struggle there is little to suggest that inflation will ease soon. It reinforces the need for operators to adopt sharp purchasing strategies in the months ahead.”
About CGA Prestige Foodservice Price Index
The Foodservice Price Index is jointly produced by Prestige Purchasing and CGA Strategy, using data drawn directly from the foodservice market covering circa 7.8m transactions per month. More information on specific categories is available on a subscription basis.
For further information, interviews or images, contact Prestige Purchasing on 01908 222678 or christopher.clare@prestige-purchasing.com.
About Prestige Purchasing
Prestige Purchasing is one of the UK’s leading specialists in procurement and supply chain management for the hospitality, catering, leisure, retail and private healthcare sectors.
About CGA Strategy
CGA is the world’s leading business intelligence and strategic consultancy provider for the out of home leisure market; the definitive source of integrated consumer insight and market measurement informing strategies for our clients’ growth. We live, love and breathe our industry, harnessing our passion and knowledge to help the market make smarter and more informed decisions. CGA works closely with consumers, retailers, suppliers, trade bodies and government so that our expert consultants can bring every strategic insight to life.
