Inflation in June 2024 stood at 3.6%, a rate now considered normal for the industry. The 12 consecutive months of decline are a very welcome trend for both businesses and consumers, who have faced several years of historically high inflation.
However, the Index also recorded month-on-month inflation of 1.3% in June— after a period of deflation or only fractional inflation, this is the largest increase in 12 months and a return to similar levels seen 5 months ago. This shift suggests that while the overall inflationary trend is encouraging, price fluctuations remain a challenge for the foodservice sector.
Of the ten categories of the Foodservice Price Index, only Vegetables remains 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. Adverse weather has also impacted other outdoor vegetables, causing delays in planting and poor availability during the seasonal crossover, and pushing up prices for carrots, onions and brassicas. More positively, two categories of the Index recorded year-on-year deflation to ease pricing pressures.
Shaun Allen, Prestige Purchasing CEO, 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.”
Reuben Pullan, Senior Insight Consultant at CGA by NIQ, said: “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.”
Reuben Pullan, Senior Insight Consultant at CGA by NIQ, said: “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.”
The exclusive Foodservice Price Index is jointly produced by Prestige Purchasing and CGA by NIQ, using foodservice data drawn from 10.7m 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 stuart.read@prestige-purchasing.com.
Visit the new Foodservice Price Index Digital Portal. The new online hub gives users on-demand access to accurate pricing data, with an array of features to interpret trends and improve decision-making. Find out more: https://prestige-purchasing.com/foodservice-price-index-fpi/
