The UK has experienced a record high in food and drink price inflation in hospitality, hitting 15 per cent for the first time in the 30 years of the CGA Prestige Foodservice Price Index (CGA PFPI).
Similarly in Australia, fruit and vegetables were 18.6 per cent higher in the year to August and one of the main drivers of inflation, according to the Guardian.
For the UK, this is the seventh month in a row that inflation has been in the double-digits, according to the data from CGA by NielsenIQ and Prestige Purchasing, with the index recording 10 per cent or higher inflation since February 2022.
While all categories of the CGA PFPI have returned year-on-year inflation, the dairy and oils and fats segments have surpassed four per cent month-on month. Only the fruit and sugars categories have seen a small reduction in prices since July.
The increased cost of energy, labour and commodities, extreme weather conditions and the war in Ukraine have contributed to the rises both in Australia and the UK. While Australia continues to see flooding, the UK and Europe have experienced droughts that have significantly impacted crops.
The UK market is likely to remain volatile due to these factors as well as the declining value of the sterling and uncertain energy pricing.
Although it is expected that the UK will reach peak inflation in the next few months, falling inflation does not assure a reduction in prices. It is expected that inflation will see prices rise more slowly through 2023, and price reductions may not be seen until 2024.
Inflation severely impacts both businesses and consumers. If the foodservice industry is to remain a strong contributor to the economies of the UK and Australia, pundits suggest prolonged government support is needed in both countries to reduce the challenges arising from inflation.
