While foodservice inflation prices sat at +3.2% in July – ‘six times higher than previous months this year’ – CEBR also revealed that wholefood prices will continue to rise by at least 5% in coming months, costing UK consumers an extra £45 million per week.
Among other foods impacted, dry and hot spells across the country have resulted in lower yields and smaller sizes of fruit and vegetables.
CEBR estimates that from March to July, the farm gate price of the following ‘rose by a fifth or more each:’
- Onions +41%
- Carrots +80%
- Lettuce +61%
- Strawberries +28%
- Wheat for bread +20%
CGA and Prestige meanwhile accounted ‘disruption to planting caused by extremely cold winter conditions and heavy spring rains’ for the price hike of lettuces, salad leaves, brassicas and potatoes.
Other ingredients notably hit:
- Dairy, with the farm gate price of butter up +24% since March
- Reduced fertility of pigs has seen an 8% rise in piglet prices since March
- Cost of grain is up as ‘much’ of the UK’s supply is imported from Europe
Looking at foodservice inflation specifically, the CGA Prestige index reveals that the cost of oils and fats reached a ‘new record high’ last month; as sugar reached a ‘record low’ thanks to messages about healthier eating and the government’s sugar tax.
Shaun Allen, Prestige chief executive, commented: “The extreme summer weather has had a negative impact on prices in many areas.
“We expect this to ease as we progress through the autumn, but markets remain much more volatile in 2018 than they have been in recent years, so we are not out of choppy waters yet.”
CGA client director Fiona Speakman added: “The record highs and lows revealed in this month’s edition of the Index indicate the volatility of foodservice prices at the moment.
“Businesses in the supply chain are facing a multitude of issues that are out of their hands, like extreme weather and fluctuations in exchange rates, and their purchasing strategies need to be sharper than ever if they are to soften the inflationary pressures.”