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Foodservice rates fell to 3.1% in July, showing that inflation has now fallen for 13 consecutive months, according to Prestige Purchasing and CGA by NIQ’s latest Foodservice Price Index report.
However, the report also indicated a slight uptick in month-on-month prices, with the whole basket of items increasing by 0.2% from June.
The rise was largely driven by the beverage categories of the FPI, which have consistently risen since March this year. This has contributed to year-on-year inflation of 7.3% in the mineral waters, soft drinks and juices segment, and 4.7% in the tea, coffee and cocoa category.
On the food side, two of the Index’s eight categories recorded a year-on-year decrease in July, with dairy, oils and fats down by -0.1% and -1.7% respectively.
In contrast, the vegetables and sugar, jam, syrups and chocolate categories saw sharp rises of 9.6% and 8.4% respectively.
According to the index, high inflation in the vegetables category has been predominantly driven by potato pricing.
Other reports suggest that English white potatoes are currently up around 90% year-on-year as a result of 2023’s challenging harvest.
That said, if the 2024 harvest progresses without climatic interruptions, price spikes are unlikely to repeat.
Shaun Allen, CEO of Prestige Purchasing, said: “The sustained year-on-year decline in foodservice inflation is encouraging, but the slight month-on-month increase and the significant inflation in certain categories, particularly beverages and vegetables, remind us that the journey towards price stability is ongoing.
“Operators should remain vigilant and proactively manage their procurement strategies to navigate the fluctuating market conditions.”
Reuben Pullan, senior insight consultant at CGA by NIQ, added: “After two years of relentless price rises, this further drop in inflation brings more relief to hospitality venues and consumers alike.
“However, while businesses can now plan with greater certainty, macroeconomic challenges and pressures in key areas of food and drink mean there is no room for complacency.”
