Inflation in food and drink prices hit a record high of 18.8% in September 2022, the latest CGA Prestige Foodservice Price Index reveals.
After reaching 15% for first time ever in August, the Index surged again during September. This means inflation has been in double digits in every month of 2022 since January.
Year-on-year price rises topped 10% in every food category of the September index, with dairy and oils & fats the most inflationary segments. Other core products for hospitality including meat, vegetables and fruit were all above 17%, with total food prices climbing 2.9% since August alone.
Food inflation is also rising fast in the retail sector, and the food category of the Consumer Price Index passed 10% for the first time in September, with fresh food climbing 13.3%. The rate of general inflation across the wider economy and the impact of steady hikes in interest rates on consumers’ spending on eating out, are also causing significant concerns amongst hospitality operators and suppliers.
The report predicts inflation will continue to be high. While food commodity markets have shown some signs of easing in recent weeks, OPEC’s reduction of oil production and the continued vulnerability of the Black Sea grain corridor deal with Russia are among the factors placing upwards pressure on pricing.
Prestige Purchasing CEO Shaun Allen said: “The speed of price rises from suppliers to the hospitality sector continues to increase, and there is little that we can see in the months ahead that will change that. Inflation has well and truly taken root in our supply chains, and whilst we do expect prices to rise more slowly in 2023 we believe we will still be seeing significant levels of inflation for most of next year. With so many other pressures it would be easy for operators to take the eye off the ball of managing supply prices, which in this market could be very costly.”
James Ashurst, client director at CGA by NielsenIQ, added: “Hospitality is besieged by the biggest challenges that many in the sector can remember. News that inflation is closing in on 20% will deal another heavy blow to the confidence of businesses and consumers alike, and there is no respite in sight. Britain’s best restaurants, pubs and bars still have a bright future, but thousands of businesses weakened by two years of COVID-19 are now extremely fragile. Government support is desperately needed to sustain them through this storm.”