Food inflation continues

The upward trend in food inflation continues apace as hospitality businesses get to grips with challenges in the industry, the latest data reveals.

Basket costs for food and drink rose 2.5% in May on the previous month, the CGA Prestige Foodservice Price Index reveals.

The index logged month-on-month inflation in seven of its 10 categories – the highest point since it began measuring foodservice prices in January 2015.

The hospitality specialists attributed the hike to restocking, challenges in production and distribution and new Brexit-related costs.

Categories particularly affected included fruit, where prices rose 7% month-on-month because of poor harvests in parts of Europe as well as import problems.

Vegetables saw a 3.2% increase, with many UK producers struggling to recruit pickers. The jump in demand from foodservice as well as a fall in milk production saw the cost of milk, cheese and eggs climb 9.9%.

May’s mounting inflation came as the hospitality sector reopened for inside service, placing pressure on the supply chain.

Shaun Allen, chief executive of Prestige Purchasing said: “The reopening of hospitality on 17 May proved much more challenging than many suppliers and operators anticipated.

“Some suppliers have even made decisions to suppress demand by raising minimum order levels and de-selecting some customers.

“With the sector still to fully reopen after lockdown we expect food and drink supply to be challenging, and inflation to strengthen.”

Leonie-Jade Leigh, client manager at CGA, said: “While it has been great to see hospitality venues opening their doors again, rising food and labour costs and COVID restrictions have created tough market conditions.”

Supply challenges would hopefully start to ease as the sector settled into a new normal of trading.

“But these figures are another reminder that the sector’s crisis is far from over, and businesses need and deserve sustained financial support from government in the months ahead.” Leigh said.