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​Welcome Relief as Foodservice Inflation Dips to 4.6% in May

​Welcome Relief as Foodservice Inflation Dips to 4.6% in May

Posted by Emma on 29th Jun 2024

In a significant development for the food service sector, year-on-year inflation as measured by the CGA Prestige Foodservice Price Index (FPI) fell to 4.6% in May, marking a 28-month low. This figure represents a notable decrease from previous months and indicates a return towards pre-pandemic inflation levels.

Last month, we also saw a month-on-month deflation of -0.4%, which was the fourth such decrease in the past 32 months. This decline not only highlights a positive shift in the food service industry's pricing trends, but also reflects broader economic movements seen in the Consumer Prices Index (CPI), instilling a sense of hope for the future.

The drop in inflation is a welcome change after several years of persistently high inflation rates. According to Reuben Pullan, Senior Insight Consultant at CGA by NIQ, "After several years of relentlessly high inflation, these figures show some very welcome respite."

The FPI's basket of prices fell month-on-month in six of its ten categories. The oils and fats category is particularly noteworthy, having experienced six consecutive months of year-on-year deflation. Additionally, after more than a year of double-digit year-on-year inflation in most categories, only one category remained in double digits in May, signalling a significant shift towards price stability across the food service sector.

Shaun Allen, CEO of Prestige Purchasing, commented on the trend, stating, "This fall of input inflation is very welcome, as the full basket of CPI has also fallen sharply to 2% year-on-year, and diners will soon come to expect stable pricing again in our restaurants." He also advised buyers to be cautious of proposed supplier price increases during this period of sharply falling inflation, highlighting the potential for stable pricing in the near future and instilling a sense of optimism.