Year-on-year food and drink price inflation in the foodservice sector fell slightly in July to 21.7% - down from 22.6% in June - as the market shows some signs of easing prices.

According to the latest CGA Prestige Foodservice Price Index, inflation still remains just below the peak of 22.9% in December 2022.

The latest index also reports a month-on-month increase of 0.7% in contrast to supermarkets, where prices fell by 0.4% between June and July.

The fish category recorded a 0.8% fall – its first month-on-month drop since July 2022 – while dairy prices remained stable.

The month-on-month increase in the vegetables category slowed by half, from 3.2% in June to 1.6% in July.

While the cost of global food commodities increased by 1.3% in July, the UN FAO Commodity Index remains 11.8% below its value in the corresponding month in 2022.

Brent crude oil prices and major currency rates remained stable throughout July. However, inflation is falling more slowly in food category, where processed items dominate and manufacturers remain exposed to high inflationary inputs including energy and labour.

Many food products are also imported and have accrued additional costs from post-Brexit trading arrangements.

Shaun Allen, CEO of Prestige Purchasing, said: “Food and drink supply into hospitality has been slower to react to falling input costs than the retail sector. We are confident that over the remainder of the year inflation will begin to ease at our kitchen doors, but both buyers and suppliers will need to play their part in curbing the continually rising costs that threaten the existence of so many of our sector’s brilliant operators.”

James Ashurst, client director at CGA by NIQ, said: “Businesses will be relieved to see a slight easing of inflation in July, and there are some welcome early signs of relief in key spending areas for both operators and consumers. However, with inflation still topping 20%, trading conditions remain extremely challenging. It is especially frustrating at a time when prices are easing in the retail sector, and reinforces the case for targeted government support for hospitality businesses.”