Foodservice Price Index rises in June as inflationary pressures build

The total basket price of the Foodservice Price Index saw a strong month-on-month increase of 2.0% in June as the UK foodservice sector saw a significant resurgence of inflationary pressures, according to data from CGA.

All ten categories of the index recorded month-on-month increases, and nine experienced year-on-year inflation amid widespread uplifts in costs.

The rise has been driven by a complex interplay of global and domestic factors, creating a challenging environment for hospitality businesses. The impact of significant increases in staffing costs introduced in April is now translating into higher food and beverage pricing.

Notable movers in the index included the mineral water, soft drinks and juices category, where year-on-year inflation rose to 6.4% thanks to soaring packaging costs, with polymer plastic prices more than doubling since November 2024.

Persistent inflation in raw materials like sugar and fruit concentrates have added to the pressures impacting essential beverage lines.

While the vegetable category recorded a slight year-on-year reduction of 0.6%, both this and the fruit category saw month-on-month increases of 1.0% and 0.9% respectively.

These upticks are largely a direct consequence of adverse climatic conditions, including severe heatwaves and prolonged dry spells across Southern Europe, a critical source for around 65% of the UK’s fresh fruit and a high proportion of its vegetable imports.

Reuben Pullan, senior insight consultant at CGA by NIQ, said: “The latest upswing in inflation adds yet another challenge to hospitality in the crucial Summer months. Alongside labour cost rises of their own, and hesitant consumer spending, it puts some businesses under severe pressure and will force them to push menu prices up further.

“The impact of climate change on fresh produce is particularly alarming, and extreme weather is very likely to make matters worse in the years ahead.”

Shaun Allen, CEO of Prestige Purchasing, added: “The June FPI paints a stark picture of renewed inflationary pressures gripping the foodservice sector. The broad-based nature of these increases, with all categories showing month-on-month inflation, signals a challenging period ahead. Businesses must be acutely aware of these rising costs and adapt their purchasing strategies to navigate this volatile landscape effectively.”