The latest CGA Prestige Foodservice Price Index (FPI) revealed inflation within the foodservice market saw year-on-year decline at the start of 2025.
Monthly inflation in the total as measured by the Index stood at 1.8%, while month-on-month inflation was flat at 0%.
It extended a welcome relief on foodservice prices—but while the overall trend for hospitality was welcome, significant global economic and political uncertainties may threaten the stability of prices in the months ahead, CGA warned.
Prestige Purchasing CEO Shaun Allen said: “While the overall FPI indicates a continued low level of inflation, the pressure on some key commodities together with the pending cost impacts from April’s tax changes are likely to see inflation rise up again over the coming months.
Challenges ahead
“Operators should ensure they have robust procurement strategies and mitigation plans in place where possible to navigate the challenges ahead.”
Of the index’s 10 categories, only fish recorded year-on-year deflation while beef prices continued to surge to record levels, driven by projections of strong demand and lower production in 2025.
There were some pockets of relief, including the start of a decrease in olive oil prices after record highs in recent years.
However, other persisting pressures on global commodity markets are likely to impact food and drink prices, the report stated.
Crude oil prices saw an 11.4% month-on-month increase, driven by geopolitical tensions, delays in OPEC+ production increases and heightened demand. Natural gas prices also continued an upward trend, rising 4.7% month-on-month.
Aluminium prices also surged 17.9% in the six months to January, putting pressure on supply chains.
Rising costs
In addition, while CGA said it was too early to fully asses the situation, it added the 25% US import tariffs caused uncertainty and could create further price volatility with “unpredictable” knock-on consequences for the foodservice sector.
CGA by NIQ senior insight consultant Reuben Pullan said: “Nineteen months of downward movement in inflation has been welcome respite for businesses in the foodservice chain besieged by cost pressures.
“However, there is no room for complacency, especially as global trade tensions rise.
“While there are positive signs, the outlook for hospitality remains cautious given the ongoing global trade tensions and rising costs.
“With other costs like labour and energy rising and many consumers still hesitant about spending, the trading environment will be difficult for some time to come.”
