Flowing “extremely high” levels of food and drink inflation throughout most of 2017, reaching 9.3% in August, the UK foodservice industry will welcome the news that inflation in the sector is “expected to ease to 3.4% by the end of 2018.”
According to Prestige Purchasing’s Foodservice Price Index (FPI) Food & Drink Inflation Report, which is launched today, food and drink inflation is predicted to average 3.4% in 2018, with the high degree of instability experienced in 2017 unlikely to be repeated.
The FPI, published with data research consultancy CGA, analyses the prices of over seven million transactions between caterers and suppliers each month. It found that many products will still cost more next year.
However, it expects exchange rates and oil prices to remain in line with 2017, but that pressure will increase thanks to labour costs and supply challenges for specific ingredients, including butter, seafood, eggs and tuna.
Christopher Clare, head of consulting and 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.”
Prestige purchasing chief executive Shaun Allen added: “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.”