Foodservice price inflation goes back above 20% in April
Potatoes saw a particularly sharp increase during April as a result of rising production costs, labour shortages, lower storage crops and significant short–supply in many parts of Europe
Foodservice price inflation has unexpectedly risen back above 20% to 21.4% in April, according to data from CGA.
Price increases had begun to slow in Q1 this year, and inflation dipped below 20% in March for the first time since mid-2022.
However, the rebound in April underlines the severe cost pressures facing businesses throughout the foodservice sector at the moment.
The increase was mostly driven by pressure in the vegetables, fish and sugar, Jams and syrups categories, which all saw prices increase between 3% and 4%.
Potatoes saw a particularly sharp increase during April as a result of rising production costs, labour shortages, lower storage crops and significant short–supply in many parts of Europe.
It is expected that this supply and demand imbalance will continue for most of the year.
James Ashurst, client director at CGA by NIQ, said: “After welcome signs respite over the first quarter of the year, it was disappointing to see inflation surge above 20% again in April. On top of soaring costs in other key inputs and the impact of the cost of living crisis on consumers, it leaves hospitality businesses facing some seismic challenges. The long-term outlook for this sector remains good, but trading remains exceptionally difficult.”
Shaun Allen, Prestige Purchasing CEO, added: “In spite of these April increases we expect to see inflation ease slowly over the course of 2023 as commodity pricing and prior year impacts kick in. The major question that remains is the speed of that decline as energy, labour costs and climate change remain significant constraints on progress with inflation reduction.”
