Inflation has started to return to food and non-alcoholic drinks after months of falling prices, according to the latest CGA Prestige Foodservice Price Index.
March figures from the Index showed a “firming of prices” year-on-year as lockdowns moved towards loosening and deflationary pressures related to Brexit receded.
As hospitality gradually moves back to full service and government policy regarding public sector debt, taxation and inflation becomes clearer, it is expected that prices will continue to increase month-on-month.
The March edition also revealed a return to “significant levels” of inflation in categories including fruit, meat and bread and cereals.
In addition, the “traditional firming” of prices that is seen in the Spring season has also contributed to the upward movement.
Shaun Allen, CEO of Prestige Purchasing, said: “We expect prices to rebound as volumes recover, probably to above 2020 levels as the year progresses. Operators would be well advised to seek price holds from suppliers whilst current inflation levels remain benign.
“They should also avoid taking a renewal of pre-lockdown supply for granted, as the commercial impacts of the Winter lockdown have been harmful to many supplier balance sheets.”
Andrew Dean, client director for retail at CGA, added: “The return of hospitality is a huge relief for operators, the foodservice sector and consumers alike.
“Keeping a close eye on pricing trends and developments and responding nimbly will be crucial to the recovery process over the remainder of 2021.”