Foodservice Price Index hits record high as supply issues mount
Seven of the 10 categories measured by CGA were in double-digit inflation in March 2022, and five recorded increases of more than 20%
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Year-on-year inflation in the foodservice sector hit 13.6% in March 2022 due to the impacts of the war on Ukraine on key food commodities, according to CGA and Prestige Purchasing.
The figure is the highest in the history of CGA’s Prestige Foodservice Price Index, and continues a surge in prices since the start of the year. It is 3.4% higher than in February, when year-on-year inflation reached double digits for the first time.
By comparison, inflation in March 2021, when the UK was still under widespread Covid restrictions, was just 0.1%.
Overall, seven of the 10 categories measured by CGA were in double-digit inflation in March 2022, and five recorded increases of more than 20%.
Prices in the oils and fats category are now over 50% higher year-on-year, while the bread and cereals segment has increased “dramatically” too.
CGA said that other categories, including fish, have been heavily impacted by the war in Ukraine as it is a major supplier of commodities including oils and grains.
High levels of inflation are also being seen in categories of the Index including fruit, dairy and soft drinks, and chicken prices are rising “sharply” too.
CGA said that with the shortages likely to continue for some time, further volatility in prices can be expected.
Shaun Allen, Prestige Purchasing CEO, said: “This conflict is truly multidimensional. It’s reduced production levels of food staples such as grains and oils, it’s driven up the cost of distribution by increasing oil prices, and it’s raised the cost of energy by restricting gas supplies.
“Inflation may calm later in the year, but prices are unlikely to fall for the foreseeable future. Actively managing supply increases using smart buying strategies and reliable market data is critical to mitigating impacts in this highly volatile market.”
James Ashurst, client director at CGA, added: “Two years on from the start of the Covid crisis, there is little sign of price pressures easing in the foodservice sector. The squeeze on consumers’ disposable income is starting to impact all sectors too.”
