Pub and Restaurant owners have been given a boost as food service cost inflation has slowed for the first time since September 2021, according to CGA’s Foodservice price index (FPI).
Food prices for hospitality venues in January rose by 22%, a drop from the record high 22.9% observed in December, CGA revealed.
While still eye-watering, it was the first dip in the index in 16 months and was led by steadying exchange rates and commodity markets and a decrease in oil prices.
Oils, such as sunflower and vegetable, and fats inflation slowed by 1.4% compared to December, but prices remain 42% ahead year-on-year- the highest increase of all the commodities.
The cost of crude oil, which has stabilised at US$86, is expected to help general inflation slow further in the coming months, CGA said.
Last month, which marked a year since double-digit inflation began, saw a continuing trend of vegetable prices surging - more than 3.5% month-on-month for the third consecutive month.
Milk and eggs inflation also increased by 1.8% compared to December, marking a 38% hike compared to January 2022.
CGA’s data chimes with the FAO food price index, a measure of global food price inflation, which slowed for the tenth consecutive month and was 1% less than in December.
Shaun Allen, chief executive officer of hospality consultancy firm Prestige Purchasing said: “Slowing consumer demand within the sector will also impact hospitality sector sales volumes, which should help to ease supplier prices.
“Energy and labour costs remain a significant challenge however, so the rate of inflation decline may be slow for some time yet.”
CGA believes the rest of 2023 will remain volatile, with supply chains unlikely to ease, higher labour costs and the energy bill relief scheme coming to an end in April.