Inflation was driven by a complex mix of global issues, including geopolitical volatility, adverse weather conditions and sustained high input costs, the latest Foodservice Price Index from CGA by NIQ and Prestige Purchasing revealed.
The price hike marked the fifth consecutive month of price increases as hospitality businesses continue to navigate widespread pressures.
There were significant upticks in the oils and fats category, attributed to higher international prices for palm, sunflower and rapeseed oils amid robust global import demand and tightening supplies.
Enduring pressures
Meanwhile, the tea and cocoa category saw the most substantial year-on-year increase, with prices surging as a result of global supply constraints and weather concerns in major producing regions.
The meat and poultry category also recorded a further price rise, with high inflation in beef and lamb lifting the Food and Agriculture Organisation’s Meat Price Index to an all-time high.
This was in contrast to poultry prices, which declined slightly due to ample supplies from abroad.
However, costs also rose in the milk, cheese and eggs categories as increased production and labour costs sustained upward price trends.
Prestige Purchasing CEO Shaun Allen said: “The August report reflects a difficult and ongoing reality for the hospitality sector. While some prices have stabilised or even slightly reduced, the overall trend is one of persistent increases driven by a mix of climate variability, geopolitical issues and enduring pressures on energy and logistics.
Crucial time
“Success for businesses in this climate lies in a proactive approach to their supply chain, where strategic planning can help to mitigate the impact of this sustained volatility and build long-term resilience.”
The increase comes at a crucial time for the hospitality sector, as it prepares for the end-of-year trading period, the report added.
CGA by NIQ senior insight consultant Reuben Pullan said: “Yet another increase in food and drink prices is cause for concern as hospitality begins the long run-in to Christmas and New Year.
“Relentless inflation is tightening the squeeze on consumers’ spending in discretionary areas, and sapping the confidence of hard-pressed restaurants, pubs and bars.
“Businesses will be keeping everything crossed for respite on both macro geopolitical factors and micro supply issues in the coming weeks.”
