Foodservice price inflation falls to lowest level since Brexit vote

The CGA Prestige Foodservice Price Index says the figures are “grounds for optimism” that costs may continue to fall after months of high inflation.

The outcome of the referendum in June 2016 led to a weakening of the pound and a sharp rise in foodservice prices, particularly on imported items.

Inflation has been running at high levels ever since, but dropped to 0.5% in February - a figure not recorded since the month of the vote.

Prices have fallen in categories including fish (-4.2%), and dairy (-2.5%).

Oil and fat prices remain high, with soybean supply issues pushing inflation up to 16.5%.

The government’s plan to introduce a sugar tax in April led to some retailers adjusting their prices in February, driving inflation in the soft drinks category up 6.8%.

“[The Index] gives reasonable cause for optimism that we might now be entering a sustained period of lower inflation, and with Brexit arrangements becoming clearer and the ‘sugar tax’ now established, we can be hopeful that the worst of recent volatility is behind us,” says Fiona Speakman, CGA client director – food.

“But businesses need to remain vigilant to any fresh pressures on prices, and stay right on top of their purchasing and pricing strategies.”

The CGA Prestige Foodservice Price Index is produced monthly using data from 50% of the foodservice market and around 7.8m transactions per month.