The latest CGA Prestige Foodservice Price Index (FPI) showed all 10 of the categories measured recorded month-on-month increases in June 2025, while nine experienced year-on-year inflation. The total basket saw a month-on-month increase of 2%.
The rise was attributed to both global and domestic factors that have created a challenging environment for hospitality businesses, including significant increases in staffing and packaging costs as well as extreme weather conditions.
Prestige Purchasing CEO Shaun Allen said: “The June FPI paints a stark picture of renewed inflationary pressures gripping the foodservice sector.
“The broad-based nature of these increases, with all categories showing month-on-month inflation, signals a challenging period ahead.
Volatile landscape
“Businesses must be acutely aware of these rising costs and adapt their purchasing strategies to navigate this volatile landscape effectively.”
Notable movers in the index included the mineral water, soft drinks & juices category, where year-on-year inflation rose to 6.4% thanks to soaring packaging costs, with polymer plastic prices having more than doubled since November 2024.
Persistent inflation in raw materials like sugar and fruit concentrates also added to the pressures impacting beverage lines.
The data also reflected the impact of climate change on the UK’s fresh produce supply. While the vegetable category recorded a slight year-on-year reduction of 0.6%, both this and the fruit category saw month-on-month increases of 1% and 0.9% respectively.
These upticks were a “direct consequence of adverse climatic conditions”, CGA said, including heatwaves and prolonged dry spells across southern Europe, a critical source for the UK’s fresh fruit and vegetable imports.
Severe pressure
Such extreme weather events drastically reduced yields and tighten supply, inevitably driving up prices in the UK market, according to CGA.
Elsewhere, persistent supply chain challenges continued to affect key protein and dairy products, with ongoing issues in beef due to reduced cattle supply, chicken impacted by higher feed costs and welfare initiatives, lamb influenced by smaller breeding flocks, and butter facing tight global milk supplies.
The overall rate of inflation rose by 3.6% in the 12 months to June 2025, up from 3.4% in the 12 months to May, and by 0.3% on a monthly basis, the latest estimations from the Office for National Statistics (ONS) recently revealed.
CGA by NIQ senior insight consultant Reuben Pullan added: “The latest upswing in inflation adds yet another challenge to hospitality in the crucial summer months.
“Alongside labour cost rises of their own, and hesitant consumer spending, it puts some businesses under severe pressure and will force them to push menu prices up further.
“The impact of climate change on fresh produce is particularly alarming, and extreme weather is very likely to make matters worse in the years ahead.”
