Foodservice YoY inflation holds steady at 1.8% in February

Foodservice inflation held steady at 1.8% year-on-year in February, while month-on-month inflation saw a slight decrease of 0.1%, according to the latest CGA Prestige Foodservice Price Index (FPI).

While this reflects some stability for the foodservice sector over the past year, the underlying global economic factors and domestic policy changes present more challenges going forward. 

Six out of 10 of the index’s categories experienced month-on-month inflation in February. Conversely, only one category out of the 10 showed year-on-year deflation. 

The highest year-on-year inflation was observed in oils and fats at 5.7%, and coffee, tea and cocoa at 6.8%. 

After the sharp increases seen in cocoa and coffee prices over the past 12 months, there has been some recent easing but both commodities still remain at nearly double the average price compared to 2023.

Meat and poultry prices are also under significant upward pressure, with beef prices continuing to trade at record highs, and price rises in chicken being seen due to the Avian Flu outbreak in Poland.

The impact of recently imposed US tariffs remains a concern, although their full effect is yet to materialise. However, there will undoubtedly be some volatility in the market as some imports and exports to and from the United States will start to seek alternative markets.

Crude oil prices saw a decline of 4.7% both year-on-year and month-on-month, primarily driven by concerns surrounding economic growth linked to potential tariffs from the US and its trade partners.

Shaun Allen, CEO of Prestige Purchasing, said: “While the overall Foodservice Price Index indicates inflation has been tracking at a relatively low level to date, the upward price pressure on key commodities like beef, chicken, dairy and coffee combined with the impacts from the National Minimum Wage and National Insurance Contribution changes which come into effect in April, means we are likely to see a resurgence of inflation in the coming months.”

Reuben Pullan, senior insight consultant at CGA by NIQ, added: “The inflationary waters in foodservice have been calm lately, but there are several major causes for concern. Confidence among both consumers and leaders remains hesitant, and businesses will need to stay laser focused on cost management and margins in the months ahead.”