Inflation concerns mounting after foodservice prices rise in December

The latest Foodservice Price Index report from Prestige Purchasing and CGA by NIQ reveals a month-on-month increase in inflation in December, raising fears of renewed price pressures for the UK’s hospitality sector. Year-on-year inflation dropped to 1.9% in the final month of 2024, but prices rose by 1.0% from November – the highest monthly jump since June 2024.

In a marked shift from the previous two months, all ten categories of the index recorded month-on-month inflation. The report said the breadth of increases suggests that inflationary pressures are becoming more widespread across the foodservice sector. More positively, some categories showed continued easing in their year-on-year inflation rates. Vegetables (up 3.0%) and sugar, jam, syrups & chocolate (up 3.5%) saw significant declines in their rate of increase – but oils and fats (up 5.7%) emerged as a category of concern. Fish (down 1.2%) remained the only category with year-on-year deflation.

The December report highlights ongoing volatility and uncertainty in the foodservice market. Adding to the complexity, the current threat of an international trade war introduces further uncertainty into the market. Disruptions to global supply chains and fluctuations in commodity prices could exacerbate inflationary pressures and create additional challenges for the hospitality sector, the report said.

Shaun Allen, Prestige Purchasing chief executive, said: “This month’s figures are a reminder that the battle against inflation is far from over. While we’ve seen encouraging progress in the year-on-year trend, the month-on-month increase is a reminder we must stay vigilant. The potential impact of the autumn Budget, combined with these latest figures, suggests that we could be facing a renewed inflationary challenge in 2025.”

Reuben Pullan, senior insight consultant at CGA by NIQ, added: “After a solid end to 2024 for hospitality sales, news of renewed foodservice inflation is a concerning start to this year. On top of other pressures including increased international economic uncertainty, national insurance rises, and hesitant consumer confidence, an upswing in prices will squeeze operators’ margins even tighter. The inflationary threat is another reason why hospitality needs more support from government so businesses can invest, create jobs and drive growth.”

Source: Propel Hospitality

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