Foodservice Price Index clocks highest rate of inflation for four years
CGA and Prestige Purchasing's Foodservice Price Index (FPI) for March tracked the highest levels of inflation among ingredient prices since the dataset's inception four years ago.
The FPI found food prices on the whole had risen by 9.8% year on year across the month. Inflation remained high in a number of categories, including fish and fruit. Fishing, in particular, has been affected by both policy, such as the lowering of quotas on cod and haddock, as well as environmental factors.
The price of oils and fats however continued to decline along with meats. Analysts put the decline of the latter down to a dip in demand following Christmas, outweighing a recent uplift in bacon pricing.
Shaun Allen, chief executive at Prestige Purchasing, said: "Food prices in the sector have been consistently tracking at higher levels for nearly a year, and the latest inflation level of almost 10% this month reflects the extent of how much the supply markets have been impacted compared to the same period last year.
"However the outlook on inflation is looking more positive for operators, as the Foodservice Price Index has fallen slightly over the past two months, indicating that inflation in the sector looks to have peaked and is forecast to drop back over the coming months, subject still of course that the outcome of Brexit does not lead to major disruption to availability of products from the EU and introduction of WTO tariffs."
Fiona Speakman, CGA client director for food, added: "The challenge of inflation in the foodservice sector intensified yet again this month, with prices of important items like fish and fruit running at high levels.
"Combined with Brexit-related economic uncertainty, patchy consumer confidence and various supply issues, it is making forecasting extremely difficult for operators across the industry.
"Whatever the eventual outcome of Brexit negotiations, it will be absolutely crucial in the coming months for all firms to stay right on top of both business-side and consumer-side trends and make their purchasing strategies as sharp as possible."
