Foodservice inflation fell to 2.8% in August

The figures, from the latest Foodservice Price Index (FPI) from Prestige Purchasing and CGA by NIQ, marked the fourteenth consecutive month of year-on-year decline, as prices continue to “stabilise” after a “prolonged period of aggressive inflation”.

However, the August report, published today (Tuesday 1 October), also revealed a 0.5% month-on-month increase in prices for a third month in a row.

Comparatively, total foodservice inflation fell to 3.1% in the year to July 2024​.

In addition, the headline rate of overall inflation as measured by the Office for National Statistics (ONS) was most recently estimated​ to have fallen to 2.2%.

Under pressure 

CGA by NIQ​ senior insight consultant Reuben Pullan said: “Several years of spiralling prices have been very difficult for hospitality, and there has been widespread relief at the steady retreat.

“Nevertheless, foodservice inflation remains above many other sectors, and an upswing over the summer shows the challenges are far from over.

“While some other costs continue to ease for businesses and consumers alike, both revenue and margins are likely to remain under pressure over the final third of 2024.” 

The uptick was primarily fuelled by the beverage category (not including alcoholic beverages), with total inflation in this segment reaching 5.8% year-on-year.

Additionally, the mineral waters, soft drinks and juices category recorded a “particularly steep” increase of 6.7%, while the tea, coffee and cocoa segment remained elevated at 4.7%, according to the report.

Proactive and adaptable 

In contrast, total food basket prices experienced a more “moderate inflation rate” of 2.5%.

Two of the eight food categories measured in the report saw year-on-year decreases, with dairy falling by 0.3% and oils & fats by 1.2%.

Meanwhile the vegetables and sugar, jam, syrups and chocolate categories generated the highest inflation, rising 9.1% and 8.2% respectively—though these figures represented a slight easing from July.

Prestige Purchasing CEO Shaun Allen added: "The sustained downward trajectory of foodservice inflation is undoubtedly positive, but the persistent month-on-month increases and stubbornly high inflation in certain categories, particularly beverages, underscore the fragility of the current market.

“Operators need to maintain a proactive and adaptable approach to procurement to navigate these choppy waters."