Unseasonal price falls drive down food and drink inflation
Fiona Speakman, client director food and retail at CGA, said: “Christmas demand usually delivers an increase in food and drink price inflation, so the easing of pressures across the Price Index is good news.
“Foodservice businesses have been battling many inflationary pressures since the Brexit Referendum in 2016, but will now be hopeful that prices are settling.”
The holiday season bought the usual increase in the price of salmon, pork and turkey but inflation fell in other categories including vegetables and dairy. A strong harvest for potatoes and onions helped bring down the price of vegetables.
Shaun Allen, chief executive of Prestige Purchasing, added: “Now is an excellent time for operators to be looking at their pricing, and taking steps to ensure that it reflects the wider market. It is very possible that this a temporary respite and we will see the index begin to rise again in the second quarter.”
The Foodservice Price Index report also found some notes of caution for 2020. Oil-producing countries are looking to cut production by one million barrels per days to mitigate the impact of the coronavirus. The price of transportation and packaging could be pushed up later in the year, affecting the cost of food.
Prestige Purchasing and CGA, using foodservice data drawn from 7.8 million transactions per month, jointly produce the Foodservice Price Index.