UK foodservice inflation heading towards 20%
According to the CGA Prestige Foodservice Price Index (FPI), food prices have increased yet again, this time hitting 19.9%. This is the ninth consecutive month of rising food prices and is bad news for businesses and consumers alike, putting pressure on margins and making it more difficult for households to make ends meet.
According to the CGA Prestige Foodservice Price Index (FPI), food prices have increased yet again, this time hitting 19.9%. Oils and fats led the charge, with prices in this category rising by almost 50% compared to last year. Milk, cheese, and eggs also saw price increases, albeit not as steeply as they’ve risen 30% when compared with October 2021.
The only category that didn't experience double-digit inflation was sugar, jams, and syrups, which is running at a 9.6% increase. Even so, core food items such as meat, fish, and vegetables were all still seeing price increases of between 16-19%. Overall, food prices climbed 1.3% month-on-month and were up 21% year-on-year. This is the month consecutive month of double-digit inflation with continued increases putting pressure on businesses in the foodservice industry who are already grappling with soaring energy costs and labour shortages.
With costs rising and consumer spending stagnating, many businesses are being forced to make tough decisions about pricing. UKHospitality, which represents about 740 companies, says food businesses are struggling with inflation of about 18% on their total costs, from food to energy bills. This means consumers are seeing price increases on some popular menu choices. For example, McDonald’s announced in July that it was increasing the price of its cheeseburger from 99p to £1.19 (a 20% increase). It said this was the first time it had increased the price in 14 years. In addition, analysis by coffee supplier UCC, published earlier this year, found that between August 2021 and July 2022, the price of popular coffees had increased by as much as 22%.
Hospitality businesses have been hit hard by the triple threat of rising inflation, energy costs and strained consumers' disposable incomes. In response, some food and drink service businesses are planning to cut trading. If you’re a business in a similar position – please get in touch. Beacon can help you identify any areas where savings can be made across your supply chain, so that you can make the most of your budget. We have a team of experienced professionals who are highly knowledgeable about the sector and understand the challenges you are facing.
Contact us today to see how we can support you navigating these difficult times.