Foodservice Price Index reaches record high, but inflation eases
The GCA Prestige Foodservice Price Index recorded month-on month rises categories in May, triggering a rise in the overall measure to its highest point to date (119.8), but inflation dropped below 6% for the first time this year.
Prestige Purchasing chief executive, Shaun Allen, said: “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.
“In a rising market it is essential that operators are well informed and manage supplier pricing with rigour.”
Fruit and vegetables are vulnerable to price fluctuations between April and June because of the unreliability of the British spring weather. Vegetable growing areas in the UK have experienced heavy rain and flooding, delaying harvesting and damaging some crops. A shortage of berry pickers in the UK has taken its toll at a crucial harvesting time. The fruit price has increased 7.8% against last month.
Fish prices have also risen after salmon farmers were pressured into selling existing stocks quickly to avoid infection of an algae bloom outbreak. The prices have spiked up by 5.9% in comparison to last month because of a decrease in supply and a lower weight caused by earlier harvesting.
Fiona Speakman, CGA client director of food, said: “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.”
However, there is a more positive outlook in the sugar category (jams syrups and confectionary) of the Foodservice Price Index as prices decreased by 2.5% month-on-month. A surplus stock in crude oil from South America has caused sugar cane to be used instead of ethanol, bringing sugar prices down.
The index is jointly produced by Prestige Purchasing and CGA, using foodservice data drawn from 7.8m transactions every month.