Hospitality businesses saw a further rise in food and drink prices in August, according to the latest Foodservice Price Index from CGA by NIQ and Prestige Purchasing.
Prices rose by 0.4% in the month, making it the fifth consecutive monthly increase. The continued rise is being driven by a mix of global pressures including geopolitical instability, poor weather conditions, and high production costs.
Shaun Allen, CEO of Prestige Purchasing, 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. 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.”
Prices in oils and fats rose significantly due to strong global demand and tightening supplies of palm, sunflower and rapeseed oils. Coffee, tea and cocoa recorded the biggest year-on-year increase, driven by supply challenges and weather conditions in key producing countries.
In the meat and poultry category, beef and lamb prices continued to climb, pushing the UN’s Meat Price Index to a record high. Poultry prices, however, eased slightly with more stock coming in from overseas. Costs also rose in the milk, cheese and eggs category, with labour and production challenges likely to push prices further in the months ahead.
Reuben Pullan, senior insight consultant at CGA by NIQ, 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.”
The trade will be watching closely in the lead-up to the key festive trading season, hoping for some relief in supply chains and cost stability.