Food prices are stabilising

By Nikkie Thatcher

- Last updated on GMT

Steady report: fruit and vegetables saw a  slight rise in inflation due to poor weather conditions
Steady report: fruit and vegetables saw a slight rise in inflation due to poor weather conditions

Related tags: Pub food

Wholesale foodservice prices are now stabilising after three years of inflation, according to new research.

The latest CGA Prestige Foodservice Price Index reported prices had been dropping, other than a small rise over the summer due to poor conditions for seasonable fruit and vegetables. However, there is a caveat that uncertainty about Brexit and challenges to some categories of food and drink mean more turbulence is a possibility.

But an exception to the ongoing decline has been the fish category as year-on-year inflation stood at 13.3% in September.

Much of the pressure on prices can be followed back to quota changes last year and the low value of sterling pushing up the price of imports.

Since much caught fish is frozen, there is a six to 12-month lag before pricing issues impact the category.

For the first time since December last year, soft beverages saw a 10.6% drop in month-on-month inflation

Current trend

However, a September fall is expected each year as suppliers decrease prices to drive volume and shift stocks after the high demand of summer.

The recent trend of premiumisation in soft drinks means inflation remains high year-on-year at 26.5% and pricing is now expected to level out before increasing again going into Christmas.

The summer was difficult for the fruit category, but it saw a month-on-month drop in prices of 2.7%. However, this does little to ease pressures and year-on-year inflation is at 17%.

Polish apples are increasingly popular worldwide and after poor weather conditions, this year’s crop is reportedly close to half the size of last year’s, pushing prices up by almost 50%.

The UK has seen a shortage of fruit-picking labour with the National Farmers Union reporting up to 16m applies being left to rot in orchards.

Good sign

Prestige Purchasing chief operating officer Phil McGuinness said: “We are still seeing issues occurring across multiple categories as we head into the winter months.

“However, the continued drop in month-on-month inflation across the index is a good sign for buyers.

“After a couple of rough inflationary years, the recent trend of negative month-on-month numbers across numerous categories will be helping to relieve pressure on operators.”

CGA client director of food and retail, Fiona Speakman said the low value of sterling alongside weather and supply changes has created turbulence in pricing over the past three years,

She added: “Signs of stability will be very welcome to businesses across the foodservice sector.

“But high year-on-year inflation in key categories like fruit, fish and soft beverages are reminders that we are not out of the woods yet, especially with the impacts of Brexit still so uncertain.”

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