Wholesale foodservice price inflation ‘highest in 9 years’

By Nikkie Sutton

- Last updated on GMT

Rising costs: inflation in the fruit category is 12.7% year on year
Rising costs: inflation in the fruit category is 12.7% year on year

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Inflation in wholesale foodservice prices hit 9% in May this year, the highest in almost nine years, according to CGA Prestige Foodservice Price Index.

This inflation rate is a huge rise from 5.8% in April​ and marks the sharpest inflation in foodservice prices since August 2008.

A rise in the price of milk, low stocks and an increase in global demand have all fuelled an increase in dairy prices, where inflation is 9.9% year on year.

Import price rise

Inflation in the fruit category was at 12.7%, with the weak pound substantially pushing up the costs of items imported from around the world.

Poor weather and disease to some key fruit growing regions of the UK and Europe are also to blame for reducing stocks and driving prices up further, the figures have showed.

On a wider scale, the UK political uncertainty surrounding Brexit negotiations, the general election and fluctuating oil prices have added to inflationary pressures in wholesale foodservice.

CGA Strategy commercial director Graeme Loudon said the inflation rate revealed the scale of the challenge foodservice businesses are currently facing.

Perfect storm

He added: “The weak pound, political uncertainty and a host of supply and demand factors are whipping up something of a perfect storm, and operators will need to be at the top of their game on procurement in the months ahead.”

Prestige Purchasing head of consulting and insight Christopher Clare urged operators to look at their place in the market and set prices accordingly.

He said: “There are few places to hide from the increased costs we are seeing flow through to operators – we would always recommend that operators test the competitiveness of their pricing in the marketplace and fully understand the justification for any increases.”

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