After months ahead of the inflation experienced by supermarkets, September saw rates in the Foodservice Price Index ease faster than in the Consumer Price Index. Year-on-year FPI inflation has now fallen by nearly five percentage points since its peak of 22.9% in December 2022.
Rates of inflation varied significantly across the 11 categories of the Index in September, with Oils & Fats falling to 8.6% but others remaining high, including Vegetables at 32%. The overall easing was supported by stability in the UN FAO Food Commodity Index, the measure of international food commodity prices, with declines in quotations for vegetable oils, dairy and meat offset by notable increases in those for sugar and maize. This index is now 10.7% below its value a year ago and 24.0% below its all-time high of March 2022.
However, the foodservice sector continues to face various inflationary pressures, including a weakening of sterling against both the dollar and Euro and high UK wage inflation of around 8%. These may act as a brake on the rate of inflation reduction in the months ahead.
Shaun Allen, Prestige Purchasing CEO, said: “The outlook for kitchen-door food prices is becoming more positive because inflation will continue to ease, albeit slowly. But it is still extraordinarily high at over 18%. A fall in prices (deflation) on the full basket of food and drink is unlikely until at least early 2025.”
James Ashurst, client director at CGA by NIQ, said: “Four successive months of inflation falls, and favourable comparisons with retail, are encouraging signs for foodservice, which has been besieged by high prices for a very long time. However, while some challenges are easing, there is little respite in sight on other pressures. Businesses will have to continue working hard to mitigate rises, generate spending and protect profit margins.”
The exclusive Foodservice Price Index is jointly produced by Prestige Purchasing and CGA by NIQ, using foodservice data drawn from 7.8m transactions per month. It contains myriad insights and information pertinent to the foodservice sector and is essential reading for anyone seeking to keep ahead of price trends and understand why they occur. More information on specific categories is available on a subscription basis.
For further information, contact Prestige Purchasing on 01908 222678 or firstname.lastname@example.org.
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