All ten categories of the Index recorded inflation of at least 10% in December, with more than half topping 20%. The oils & fats category led the surge, with year-on-year inflation surging to a ‘spectacular high’ of 47%.
Shaun Allen, chief executive of Prestige Purchasing, 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.”
Energy costs continue at ‘extremely high’ levels against a background of tightening Government support, while higher labour costs across supply chains show few signs of relief. With a significant easing in prices only likely to begin with an end to conflict in Ukraine, the outlook for 2023 therefore remains volatile.
James Ashurst, client director at CGA by NielsenIQ, added: “Businesses up and down the foodservice supply chain were besieged by inflation in 2022, and as we enter 2023 there is little respite in sight. Alongside the cost of living crisis for consumers, soaring food and drink prices are piling enormous pressures on hospitality, and sustained Government support is needed to protect businesses and jobs in this vital sector of the UK economy.”
Commenting on new data from the CGA Prestige Foodservice Price Index, showing food and drink inflation for food service businesses reached a record high of 24% in December 2022, UKHospitality chief executive Kate Nicholls said: “The central food and drink element of hospitality means that this level inflation puts the sector yet deeper into jeopardy.
“It’s another in a series of price increase across all fronts of operations and businesses will have no choice but to pass it on to customers. That will make it harder for the Government to deliver on its key commitment to reduce inflation across the wider economy.
“This simple economic fact underlines the importance of Government investing in and supporting the sector to help keep our prices as low as possible, if they want to achieve their target of halving inflation. We recognise that public finances are tight, but an injection of support into hospitality can repay the cost many times over through the additional sales it creates, the growth this generates and the jobs it can offer.”