Food prices set to rise at least 3% by new year
The latest edition of the CGA Prestige Foodservice Price Index found increasing volumes from hospitality, business and industry, combined with the return of schools has driven a further surge in supply chain volumes in September, leading to a sharp rise in product shortages.
It also stated while issues have eased slightly over September and into October, incoming supply to wholesalers remains under deep stress and cost increases will continue into the winter months.
Sharp rise expected
In addition, major issues including a chronic shortage of HGV drivers, pickers and manufacturing and production staff has led to insufficient stocks in key areas, with post-Brexit difficulties in the importation of goods adding to shortages.
The latest information from the index reported prices remained flat year on year in September but it predicted inflation is likely to increase for the remainder of 2021 and into 2022, with a sharp rise expected in the months ahead.
Higher peak
Prestige Purchasing CEO Shaun Allen said: “From a flat September, we expect prices to be up between 3% and 6% year-on-year by the new year, with an even higher peak thereafter. Operators would be well advised to focus particularly on the weeks commencing 29 November and 6 December, as these are peak volume weeks for our suppliers.”
The autumn may prove to be the calm before the story in foodservice price inflation, CGA client director James Ashurst said.
He added: “Rising demand, falling supply and distribution issues are straining many areas of the market and prices will inevitably rise in the months ahead.
“It is an unwelcome trend for hospitality businesses that are already facing severe operational challenges and highlights the sector’s need for sustained Government support in the months ahead.
