Despite a good end of year for foodservice price inflation – reaching its “lowest point” since the start of 2017 in November at 3.4% – CGA and Prestige’s latest Index reveals that foodservice price inflation rose to 5.1% in December.

Citing a number of factors, including the weakened sterling, Brexit uncertainty and supply and labour demands as reasons, “inflation in the sector is once more above the wider level of UK inflation” and “instability in foodservice pricing is likely to continue into 2018,” CGA said.

Of the 10 food and drink categories monitored, inflation proved to be “running high” in most with costs of fish, oils and fats, soft drinks, fruit and vegetables as well as poultry all facing “substantial” rises.

Head of consulting and insight at Prestige Purchasing, Christopher Clare, said: “While we have seen more reaction from the markets this past month as the government began to clarify its position and desired direction for Brexit, it did not prevent the continuing correction from the price peaks that followed the referendum.

“Some further falls can be expected but these will be balanced against rising oil prices and supply issues in some categories.”

Fiona Speakman, CGA client director of food, added: “After relatively modest inflation in November, December’s Foodservice Price Index returned to the trend of substantial pricing pressure that dominated 2017. With many important areas of the market facing sector-specific challenges and the value of sterling still low, the Index confirms that any lull in inflation is likely to be short-lived. For all foodservice businesses, it emphasises the vital importance of staying on top of price trends and setting purchasing strategies accordingly in 2018.”

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