Foodservice inflation falls for 19th month in a row in January

Foodservice inflation has seen its 19th consecutive month of decelerated year-on-year inflation in January, according to CGA and Prestige Purchasing foodservice Price Index (FPI). 

Monthly inflation in the total basket of items measured by the index stood at 1.8%, while month-on-month inflation was flat. 

While this data brings a welcome relief on foodservice prices in hospitality, CGA and Prestige Purchasing believe that global economic and political uncertainties may still threaten the stability of prices in the months ahead. 

Of the 10 categories in the index, only fish recorded year-on-year deflation and just three delivered month-on-month deflation. Beef prices have continued to surge to “record” levels, driven by projections of strong demand and lower production in 2025. 

However, the findings pointed to some pockets of relief, including the start of a decrease in olive oil prices after record highs in recent years.

Other persisting pressures on global commodity markets are likely to impact food and drink prices. Notably, aluminium prices have surged 17.9% over the six months to January 2025, following increased demand from China, rising energy costs, supply chain disruptions and escalating fears of a global trade war. 

Shaun Allen, CEO of Prestige Purchasing, said: “While the overall Foodservice Price Index indicates a continued low level of inflation, the pressure on some key commodities such as beef, energy and crude oil together with the pending cost impacts from the NMW increases and NICS changes are likely to see inflation rise up again over the coming months. 

“Operators should ensure they have robust procurement strategies and mitigation plans in place where possible to navigate the challenges ahead.”

Reuben Pullan, senior insight consultant at CGA by NIQ, added: “Nineteen months of downward movement in inflation has been a welcome respite for businesses in the foodservice chain besieged by cost pressures. However, there is no room for complacency, especially as global trade tensions rise. 

“While there are positive signs, the outlook for hospitality remains cautious given the ongoing global trade tensions and rising costs. With other costs like labour and energy rising and many consumers still hesitant about spending, the trading environment will be difficult for some time to come.”