Food and Drink

Labour shortages could spark further inflation, CGA warns

The monthly report showed how problems ‘intensified’ throughout food and drink supply markets in July, with shortages of HGV drivers a particular concern

Labour shortages, insufficient manufactured stocks and post-Brexit challenges could lead to further inflation in the months ahead, according to the latest CGA Prestige Foodservice Price Index.

The monthly report showed how problems “intensified” throughout food and drink supply markets in July, with shortages of HGV drivers a particular concern.

The Index indicated further year-on-year inflation in prices in most food and drink categories during the month, and forecasts more increases over the rest of 2021.

Due to ongoing supply issues, many food businesses are also experiencing difficulty in securing chef labour, leading to an increasing number reducing their menu range, and/or seeking prepared products from suppliers.

James Ashurst, client director at CGA, said: “The foodservice sector is bouncing back well from the turmoil of Covid, and consumer demand for hospitality experiences remains strong. But labour shortages and price inflation are threatening the recovery, and it is particularly frustrating that most of the challenges are out of businesses’ own hands.

“With few solutions in sight in the short-term, they are going to have to be agile and resourceful in their purchasing and supply arrangements in the run-up to the crucial Christmas period.”

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