Inflation settles on winter food pricing

Food pricing has seen a settling of inflation, with the year-on-year measure at the lowest point for the month of October since 2016, the latest edition of the Foodservice Price Index from CGA and Prestige Purchasing has shown.

October usually sees a jump in inflation from the onset of winter pricing a switch to imported fruit and vegetables and increased demand on the run up to Christmas, but the index has revealed inflation of less that 1% in seven of the ten categories.

As revealed by CGA and Prestige earlier this month, food inflation rates almost doubled in 2019 as a result of adverse weather conditions and fisheries stock pressures, and the latest index indicates that categories like fruit and fish continued to experience supply and demand pressures.

For fruit, weather and labour issues have negated the usual drop in prices over summer, and inflation remains at a high level of 14.9%.

There have also been supply problems in South Africa and Chile, where crop yields have been down 30% and 25% respectively, and the recent high demand for avocados and ‘ready to eat crops’ has left growers in short supply.

Predominantly due to pressures on exchange rates – the UK imports around 70% of its fish – the fish category has maintained high year-on-year inflation of 13%.

Whilst better than expected weather conditions in the North East Atlantic has seen an increase in the quality and size of Cod and Haddock catches, there has been a decline in Scottish salmon harvest as cold and turbulent weather kicks in.

“At the end of a tough year for the foodservice sector, it is pleasing to see some stability in prices,” said Fiona Speakman, CGA client director for food and retail.

“If businesses can secure greater clarity about Brexit, a strengthening of the pound to reduce import costs, and an easing of some of the global supply pressures affecting prices, they can look forward to planning their buying strategies with a little more confidence in 2020.”