Foodservice price inflation is expected to ease to 3.4% by the end of 2018 but many products will continue to cost more.
This is according to Prestige Purchasing’s Annual Food & Drink Inflation Report, which was launched last night.
It follows a peak in foodservice inflation in August, when it hit 9.3%.
The report predicts exchange rates and oil prices will remain broadly in line with 2017, but warns of heightened risk from labour costs, weather and several specific ingredients where current supply challenges may intensify. As a result, it estimates food and drink inflation in foodservice to average at 3.6% during 2018, with December 2018 inflation at 3.4%.
Christopher Clare, head of consulting & insight at Prestige Purchasing, said: “In 2017, we have seen inflation at the kitchen door surge ahead of increases in supermarket prices. By contrast to Foodservice supply, the Retail market for food is highly competitive and supermarket operators have both absorbed increases into margin or delayed and refused increases from producers altogether.”
Shaun Allen, chief executive of Prestige Purchasing, said: “Looking to 2018 levels of volatility are falling, but we still expect challenges in Seafood – including Tuna, Butter (and Dairy as a whole), Eggs due to Fipronil, and Vegetable Oils. With all the current uncertainty that surrounds our exit from the EU, the year after (2019) still looks a very high-risk year for the cost of food and drink.”