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Foodservice Price Index reveals increase in prices

Foodservice Price Index reveals increase in prices
Foodservice Price Index reveals increase in prices
22 Feb 2017
The latest edition of the Foodservice Price Index from Prestige Purchasing and CGA Strategy has found a 2.9% increase in foodservice prices in January compared to the start of 2016.

The index showed the upward trend is due to low supply and rising costs of key items such as sugar, oil, vegetables and hot drinks with rising oil costs. A weak pound and rising oil costs put additional pressure on prices.

Phil Tate, chief executive of CGA strategy, said: “The latest edition of our Foodservice Price Index shows that pressure on pricing continues to mount.

The broad range of categories facing inflation is a cause for concern and it makes the need for resourceful purchasing strategies and careful price monitoring all the more apparent.”

The hike in price of vegetables, up 10.4% compared to January 2016, was a result of poor weather condition in Europe and prompted supermarkets to ration or withdraw items. Oils and fats prices were 9.5% higher than the previous year due to low palm oil supply and prices of sugar were up by 4.9% due to lower exports from key markets.

Christopher Clare, head of consulting and insight at Prestige Purchasing, said: “What we are seeing in this month’s Foodservice Price Index figures is the pass-through of sharp increases in the commodity prices of many imported salad products and vegetables. Whether it reflects the full extent of the increases remains to be seen, and next month’s figures will be key.”

The index revealed domestic production should reduce reliance on expensive imports and relief in milk, cheese and egg prices, which were 1.3%, lower in January than the year before.

The Foodservice Price Index is produced using data from 50% of the foodservice markets and around 7.8 million transactions a month.