Fish prices leap 23% as foodservice inflation rises again

Wholesale Foodservice price inflation rose to 9.3% in August, to reverse two months of reductions, the Foodservice Price Index has revealed.

Inflation has grown by more than two percentage points from 7% in July - compared with 8.8% in June and 9% in May, it says - with foodservice price inflation well ahead of historical averages throughout the summer.

Food items with particularly high levels of inflation in August include fish, which leapt 22.7% from 5% in July, and oils and fats and milk, and cheese and eggs, where levels were 15% and 14.7 respectively.

Sugar and confectionery was the only category to experience deflation year on year in August, with prices falling 2.1%.

Meat prices also fell to a four-month low, thanks to improved supplies in the UK, but meat is still more expensive than in August last year, according to the data.

Key factors driving inflation include the weak pound, which is pushing up the price of imports from overseas, and rising oil prices.

“With the Price Index up over two percentage points on last month, we are now experiencing the highest year-on-year movement since the index began,” says Christopher Clare, head of consulting and insight and Prestige Purchasing.

Chris Galvin, chef proprietor of restaurants and pubs including Galvin Bistrot de Luxe in London and The Green Man in Essex, says that he has been hit by butter prices having more than doubled in recent months. He believes the industry is suffering from a “perfect storm” of rises in ingredient costs and rents, twinned with a shortage of staff.

In the face of rising costs, restaurants are having to follow the big grocery brands and reduce portion sizes rather than raise prices, he says. “It is like the Toblerone effect, where people are shrinking their offers but keeping the prices the same.

"We are finding that we need to shrink our menus so that we use fewer ingredients but change the menus more regularly so that we keep our customer base.”

UK fruit and vegetable prices are likely to rise next year, the report adds. Uncertainty over Brexit could potentially lead to shortages of migrant pickers for domestic fruit and vegetable growers from 2018, weakening suppliers and increasing the UK’s dependence on imports, it says.