The latest Foodservice Price Index from NIQ and Prestige Purchasing found prices fell by 0.1% month on month in May, following an inflationary rise in April.
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The report said the movement brought a measure of stability to the sector, with downward price pressure seen in fresh produce, dairy and oils.
Vegetable prices continued to fall as improved European growing conditions boosted supply volumes for salads, leafy crops and outdoor produce.
The milk, cheese and eggs category also eased, supported by strong domestic milk production and retail competition.
Oils and fats recorded a modest decline, reflecting softer international palm and soybean oil markets.
Cost pressures remain
However, the report warned inflationary pressures remained across several food and drink categories.
Soft drinks, jam, syrups and chocolate saw price rises, driven by pressure in global sugar markets.
Coffee, tea and cocoa also increased in May, with irregular rainfall and low stock levels continuing to push up coffee prices from Brazil and Vietnam.
Fish remained structurally inflationary due to strict North Atlantic quota restrictions and high operating costs across fisheries and aquaculture.
Prestige Purchasing chief executive Shaun Allen said the 0.1% monthly fall provided a “welcome, albeit slight, reprieve” for hospitality operators.
He said: “The deflation we are seeing in key domestic categories like dairy and vegetables is a testament to strong local supply and the effectiveness of forward buying strategies. However, operators cannot afford to be complacent.”
Allen warned global energy markets were continuing to affect sugar and beverage costs, while fish and coffee remained under pressure from structural supply issues.
He added that procurement teams should use the current period of stability to secure supply lines against potential volatility later in the year.
Fragile businesses
NIQ senior insight consultant Reuben Pullan said signs of stability were welcome at a time of “exceptionally high costs” for hospitality.
However, he warned sustained deflation appeared unlikely, with many commodities still at risk of volatility.
Pullan said: “Businesses across the sector are working relentlessly to sustain sales and profits at the moment, with thousands now very fragile.
“As we enter the second half of 2026 and await a new Prime Minister, many will be hoping for targeted and meaningful industry support for this persistent cost burden.”
