Food inflation at the end of last year was a record 24%, according to new data from the hospitality and food service industry, with indicators that prices will continue to rise in 2023.
December was the 11th consecutive month of double-digit inflation for the CGA Prestige foodservice price index, with November having been the first to record inflation of over 20%.
This compares to the FAO food price index from the UN, which has declined for nine months in a row and in December fell 1.9% compared to a year ago.
Looking ahead to future pricing in 2023, CGA and Prestige said there were mixed signals, with the FAO index declining and both crude oil prices and exchange rates, the two leading influencers on food prices, "more benign than during most of 2022".
On the other side of the coin, food service companies continue to face energy costs at "extremely high levels", elevated labour costs and doubts over future government support.
"With a significant easing in prices only likely to begin with an end to conflict in Ukraine, the outlook for 2023 therefore remains volatile," said CGA, which is part of NielsenIQ.
Prestige Purchasing chief executive Shaun Allen said: “The next step on our inflation journey will be when the current 2% to 4% month-on-month increases start to slow down.
“We expect this to start to happen in the months ahead, but we are likely to experience an extended period where prices continue to go up, but just more slowly. These market conditions provide an opportunity for some suppliers to increase prices ahead of market, and buyers should seek hard data to verify and benchmark any increases during 2023.”
For the CGA Prestige index, drinks inflation diluted the effect, with a food basket including beverages ending slightly below the overall index level, up 22.9% on a year ago.
Inflation was above 20% for more than half of the 10 food categories in the index in December, with all in double-digits.
Oils & fats inflation was an eye-popping 47%, the highest of the categories.