The report from Prestige Purchasing and CGA by NIQ reveals a month-on-month increase in inflation in December, raising fears of renewed price pressures for the UK’s hospitality sector.
The silver lining of year-on-year inflation dropping to 1.9% in the final month of 2024 has not disguised the highest monthly jump since June 2024.
In a marked shift from the previous two months, all 10 categories of the FPI recorded month-on-month inflation. The report’s author said the breadth of increases suggests inflationary pressures are becoming more widespread across the foodservice sector.
Although some categories showed continued easing in their year-on-year inflation rates with vegetables (up 3.0%) and sugar, jam, syrups & chocolate (up 3.5%) saw significant declines but oils & fats (up 5.7%) emerged as a category of concern while fish (down 1.2%) remained the only category with year-on-year deflation.
Volatility and uncertainty
The report highlighted ongoing volatility and uncertainty in the foodservice market, and the need for operators to remain vigilant and closely monitor price trends across all categories.
CGA by NIQ added the current threat of an international trade war is introducing further uncertainty into the market.
Disruptions to global supply chains and fluctuations in commodity prices could exacerbate inflationary pressures and create additional challenges for the hospitality sector.
And proactive measures and flexible procurement strategies will be crucial to navigate these challenges and mitigate the impact of potential price increases on businesses and consumers.
Prestige Purchasing CEO Shaun Allen said: “This month’s figures are a reminder that the battle against inflation is far from over.
“While we’ve seen encouraging progress in the year-on-year trend, the month-on-month increase is a reminder we must stay vigilant.
Renewed challenge in 2025
“The potential impact of the Autumn Budget, combined with these latest figures, suggests that we could be facing a renewed inflationary challenge in 2025.”
CGA by NIQ senior insight consultant Reuben Pullan added: “After a solid end to 2024 for hospitality sales, news of renewed foodservice inflation is a concerning start to this year.
“On top of other pressures including increased international economic uncertainty, [employers’] national insurance rises and hesitant consumer confidence, an upswing in prices will squeeze operators’ margins even tighter.
“The inflationary threat is another reason why hospitality needs more support from Government so businesses can invest, create jobs and drive growth.”
