Restaurant and grocery bills are expected to ease as food inflation is predicted to remain at 2.03% next year with chicken prices set to rise and milk expected to drop.
That is according to procurement group Prestige Purchasing its annual Food Inflation Report which predicts food costs will continue to stabilise in the coming year following the drop in prices in 2014 which saw food inflation hit -1.5%.
“The sharp decline (in 2014) was caused by a range of unexpected factors that have driven down food prices. Warm, consistent weather; a significant drop in the price of crude oil and ranging economic factors, including the strengthening of the Pound against the Euro have contributed to a reduction in the food pricing.”
Inflation and other international factors are due to impact food and drink prices with chicken, milk, cocoa and beer all expected to change.
A new strain of bird flu found in the UK is expected to impact the price of chicken – if it spreads to the poultry sector. Prestige predicts reduced supply would lead to higher costs; however consumer fears relating to bird flu could put customers off eating chicken which would lead to reduced demand.
An increase in production combined with a reduction in demand is expected to lead to a drop in prices of milk, milk powder, butter and whey powder.
Meanwhile poor cocoa crops and the effect of Ebola on cocoa-producing areas means chocolate may become a luxury item.
The rising popularity of ‘free-from’ foods, including gluten-free products, has led to producers and restaurants making more of an effort to showcase the provenance and quality of food. The report notes: “Furthermore, many restaurants have noted that consumers are happy to pay more for ‘free-from’ goods. Consumers could therefore be expected to be paying more to eat out as restaurants spend more on quality ingredients to meet consumer demand.”
