After six consecutive months of rising costs, food and drink prices in hospitality fell by 0.3% in October 2025, the latest Foodservice Price Index from CGA by NIQ and Prestige Purchasing reveals.
The downward movement brings some respite to the sector ahead of the festive trading period. However, despite the dip, there remains significant volatility across several key food and drink categories.
October’s most significant downward movement was recorded in the vegetables category, where prices fell by -1.7% year-on-year. This decline reflects improved seasonal supply compared to 2024, supported by better crop emergence and completed plantings across the UK. However, the outlook remains mixed, with potato yields varying significantly between Scotland and England due to prolonged heat, and brassica sizes remaining small and making winter availability dependent on improved rainfall.
There was also an easing of inflation in October in the milk, cheese & eggs category, where prices fell 1.5% month-on-month. This reflects a softening in global dairy markets, with declines in whole milk powder and cheese quotations.
Conversely, the meat & poultry category moved in the opposite direction, with prices rising +0.7%. While global meat indices have shown some easing, UK poultry markets face severe volatility due to renewed Avian Flu outbreaks. Unprecedented 30-day export bans on major turkey suppliers are creating acute shortages and record-high spot prices just as festive demand accelerates.
Shaun Allen, CEO of Prestige Purchasing, said: “The slight decline in the FPI to 150.6 offers a welcome, albeit temporary, respite for operators after six months of consistent month-on-month inflation. However, the market remains incredibly fragile. With Avian Flu disrupting poultry supply during the crucial festive period and structural costs like energy and labour remaining high, this month’s easing should be viewed with caution. Operators must remain agile in their sourcing strategies to navigate the volatility expected through winter.”
Reuben Pullan, senior insight consultant at CGA by NIQ, added: “As hospitality begins the crucial run-in to Christmas, news of an easing in inflation is a welcome development. Nevertheless, months of increases have taken a heavy toll on businesses, and there are plenty of warning signs to suggest this will be temporary respite rather than a turning of the tide. Put alongside ongoing caution in consumer spending, it means hospitality operators will have to be at the top of their game to sustain sales and protect margins over the festive season.
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