Food and Drink

Foodservice inflation reached ‘highest ever level’ in May, says CGA

The index showed that food and drink prices increased by 2.5% from April 2021, which were the result of a combination of factors including restocking, challenges in production and distribution and new Brexit-related costs

Foodservice price inflation reached its “highest ever level” in May 2021 as indoor service resumed in hospitality venues, according to the latest edition of the CGA Prestige Foodservice Price Index.

The index showed that food and drink prices increased by 2.5% from April 2021, which were the result of a combination of factors including restocking, challenges in production and distribution and new Brexit-related costs.

May’s “mounting” inflation came as the hospitality sector reopened for inside service, placing pressure on the supply chain.

The data also showed that high demand and “severe” shortages of labour across food manufacturing, agriculture, warehousing, wholesale distribution and hospitality led to many firms having to raise pay levels, which can be expected to feed through into prices in the months ahead.

With demand rising and supply and labour issues continuing, the latest index predicts that inflationary pressures are likely to intensify over the summer.

Leonie-Jade Leigh, client manager at CGA, said: “While it has been great to see hospitality venues opening their doors again, rising food and labour costs and Covid restrictions have created tough market conditions.

“Supply challenges will hopefully start to ease as we settle into a new normal of trading. But these figures are another reminder that the sector’s crisis is far from over, and businesses need and deserve sustained financial support from the government in the months ahead.”

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