Droughts, the war in Ukraine and spiralling costs of commodities, energy and labour throughout the supply chain all contributed to the record high.
The Index has now recorded double-digit inflation in every month of 2022 since February, with prices increasing nearly 2% from July alone. Every category of the Index experienced year-on-year inflation, with two key segments dairy and oils & fats surpassing 4% month-on-month. Only fruit and sugars registered a small fall in prices from July.
Shaun Allen, chief executive of Prestige Purchasing, said: “In the months ahead it is likely that we will reach peak inflation, then see some levelling-off, before a gradual fall during next year. But falling inflation does not mean that prices will go down. For at least the full year of 2023 we expect that they will just increase more slowly. With so many other pressures it would be easy for operators to take the eye off the ball of managing supply prices, which in this market could be very costly.”
Dry weather in Europe had a ‘severe impact’ on many crops and pastures, though conditions have been more favourable in recent weeks. There has also been some easing in commodity markets and the price of oil, but with energy pricing very uncertain and the Ukraine war continuing, the market is likely to remain volatile for some time. Steep falls in the value of sterling will also push up the cost of imports and fuel inflation.
James Ashurst, client director at CGA by NielsenIQ, said: “Inflation is having a severe impact on businesses and consumers alike, and foodservice is caught in the eye of a fierce storm. While some pressures may be easing, a tough winter lies ahead. The foodservice sector remains a vibrant contributor to the UK economy, but it deserves urgent, targeted and sustained government support to mitigate inflationary challenges and sustain vulnerable businesses.”