The latest CGA Prestige Foodservice Price Index shows that price inflation in the foodservice sector remained largely unchanged in February, with the Index dipping by just 0.1 point from January. Annual inflation held at 1.8%.
While this suggests a period of relative stability, pressures are continuing to mount across several key categories. Oils and fats saw a 5.7% increase year-on-year, while coffee, tea and cocoa were up 6.8%. Prices for cocoa and coffee remain nearly double what they were in 2023, despite some recent softening.
Beef continues to trade at record highs, and chicken prices are rising due to the Avian Flu outbreak in Poland. Dairy is also under pressure.
There are further challenges ahead. Although the impact of US tariffs has yet to fully materialise, shifts in import and export routes are expected to bring volatility. Crude oil prices have dropped, but uncertainty remains around global growth and trade.
Domestically, the sector is also facing increased labour costs following April’s rise in the National Minimum Wage and National Insurance changes. These additional costs are likely to be felt throughout the supply chain.
Shaun Allen, CEO of Prestige Purchasing, said, “While the overall Foodservice Price Index indicates inflation has been tracking at a relatively low level to date, the upward price pressure on key commodities like beef, chicken, dairy and coffee combined with the impacts from the National Minimum Wage and National Insurance Contribution changes which come into effect in April, means we are likely to see a resurgence of inflation in the coming months. Operators should ensure they have robust procurement strategies and mitigation plans in place where possible to navigate the challenges ahead.”
Reuben Pullan, senior insight consultant at CGA by NIQ, added, “The inflationary waters in foodservice have been calm lately, but there are several major causes for concern. Increases in National Insurance contributions will hit hospitality operators’ margins and are also likely to drive up some prices, while tariff wars will inevitably cause more collateral damage across the sector. Confidence among both consumers and leaders remains hesitant, and businesses will need to stay laser focused on cost management and margins in the months ahead.”
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