The latest CGA Prestige Foodservice Price Index showed the cost of food products rose 2.3% year-on-year and 0.6% month-on-month, highlighting the ongoing challenges faced by businesses.
A combination of global commodity market volatility, persistent supply chain disruptions, escalating energy costs and the significant impact of adverse weather conditions were the primary drivers of the price hikes, according to the report.
Several categories experienced increases, with the meat and poultry segment seeing rises affected by strong demand for beef and ongoing challenges in poultry production.
Meanwhile the oils and fats category also saw costs rise, influenced by high demand for soy and rapeseed oils. The mineral water, soft drinks and juices sector also saw higher levels of year-on-year inflation.
Concerning stock declines
The fish category, while showing a modest year-on-year increase of 0.4%, recorded a sharp 2% rise month-on-month.
This was largely attributed to severe declines in hake stocks and quota reductions for cod in key fishing grounds, which CGA said were expected to lead to sustained high prices and a shift towards alternative white fish species.
Furthermore, the driest spring in a century has begun to impact root vegetable yields, which saw a 0.6% annual increase and indicated further potential price increases later in the season for this category, the report detailed.
Prestige Purchasing CEO Shaun Allen said: “The April data underscores the complex landscape our hospitality clients are navigating.
“While we’ve seen some seasonal variations, the underlying inflationary drivers remain firmly in place.
“Categories such as meats, oils and fats and soft drinks are experiencing higher levels of inflation year-on-year, while critical staples like fish are seeing sharp month-on-month increases, driven by concerning stock declines and quota reductions.
Upward pressure
“Inflation has remained relatively low over the past 12 months, but we are now seeing upward pressure coming through in a number of categories and it is important for operators to mitigate these impacts through strategic procurement and supply chain optimisation.”
This comes as the latest figures from the Office for National Statistics (ONS) showed the headline rate of inflation jumped 3.5% in the year to April, meanwhile wet weather dampened drink sales at the end of last month.
Insolvencies across the pub sector were also found to have surged in April, attributed to ongoing economic headwinds teamed with April’s hikes to Employer National Insurance Contributions, according to data from accountancy firm Price Bailey.
CGA by NIQ senior insight consultant Reuben Pullan said: “News of an uptick in key food and beverage costs in April is another unwelcome development for hospitality operators and their suppliers.
“Alongside a sharp increase in labour costs from April, it ratchets up the pressure on both profit margins and menu prices for consumers.
“Warmer weather has boosted trading in pubs in particular over the late Spring, but better Government support is urgently needed to help the sector sustain investment and protect jobs.”
