The latest figures from the Foodservice Price Index (FPI) means inflation has now fallen for 13consecutive months.
However, the report also indicates a slight uptick in month-on-month prices, with the whole basket of items increasing by 0.2% from June.
“After two years of relentless price rises, this further drop in inflation brings more relief to hospitality venues and consumers alike,” says Reuben Pullan, senior insight consultant at CGA by NIQ.
“With energy costs easing too, the tight squeeze on operators’ margins and people’s spending may finally be loosening. However, while businesses can now plan with greater certainty, macroeconomic challenges and pressures in key areas of food and drink mean there is no room for complacency.”
The rise was largely driven by the beverage categories of the Foodservice Price Index, which have consistently risen since March this year, contributing to year-on-year inflation of 7.3% in the mineral waters, soft drinks and juices segment; and 4.7% in the tea, coffee and cocoa category.
On the food side, two of the Index’s eight categories recorded a year-on-year decrease in July, with dairy down 0.1%, and oils and fats falling by 1.7%.
In contrast, vegetables saw a 9.6% rise in prices, with the sugar, jam, syrups and chocolate category reporting an 8.4% increase.
According to the Index, high inflation in the vegetables category is predominantly driven by potato pricing.
Reports suggest that English white potatoes are currently up around 90% year-on-year as a result of 2023’s challenging harvest. However, if the 2024 harvest progresses without climatic interruptions, price spikes are unlikely to repeat.
“The sustained year-on-year decline in foodservice inflation is encouraging, but the slight month-on-month increase and the significant inflation in certain categories, particularly beverages and vegetables, remind us that the journey towards price stability is ongoing,” says Shaun Allen, Prestige Purchasing CEO.
“Operators should remain vigilant and proactively manage their procurement strategies to navigate the fluctuating market conditions.”
