Month-on-month price rises have been recorded in nine out of 10 categories in May, according to the latest CGA Prestige Foodservice Index.
The increases have lifted the overall index measure to its highest point to date (of 119.8), however there looks to be some respite on the horizon as year-on-year inflation is slowing easing and has fallen below 6% for the first time this year. It is currently running at 5.3% year-on-year.
Fruit prices are up 7.8% against the previous month, while fish is up 5.9%. However, prices in the sugar, jam, syrups and chocolate category fell by 2.5%.
The weather has been more unsettled this year, with more rain and a tendency for more extreme events. A key fruit growing region in Italy suffered torrential hailstorms, damaging large quantities of its soft fruit crops including peaches and nectarines, for example, while vegetable growing areas in the UK have also experienced heavy rain and flooding.
In addition to the impact on weather, shortages of berry pickers in the UK has caused problems for harvesting, with reports as many as three in four vacancies are going unfilled.
Fish prices rose after salmon farmers were pressurised to sell existing stocks quickly to avoid infection in advance of an algae bloom outbreak. Prices then spiked due to a decrease in supply and a lower weight caused by earlier harvesting.
“Although inflation has been slowing over the past six months, we are still observing food prices rising due to factors which are affecting almost all categories including exchange rates, supply market challenges, variable weather conditions and continued Brexit uncertainties,” said Prestige Purchasing’s chief executive Shaun Allen. “In a rising market it is essential that operators are well informed and manage supplier pricing with rigour.”
CGA client director of food Fiona Speakman added: “There is a distinct contrast in the latest edition of the Foodservice Price Index, between month-on-month price pressures and a welcome slowing of inflation year-on-year. It also makes clear the significant impact of the weather on the prices of key foodservice items, and the sharp fluctuations generated by extreme conditions could be a sign of things to come. Businesses can’t control the weather of course, but they can adapt their sourcing and buying strategies to mitigate some of its impacts.”