Food inflation starts to slow down

Food inflation is coming to a slowdown after growing by nearly 14% over the last 12 months, research has found.

Latest figures from consultancy Horizons show that, in August, annualised food costs rose by less than one percent (0.8%) compared with an increase of 3.1% in July.

The slowdown is the result of a combination of factors including a good harvest for some commodities as well as the stability of the pound against the Euro. World commodity prices are beginning to be readjusted, with price rises for fresh fish and vegetables well below the average last month.

Horizons managing director Peter Backman said that foodservice operators have raised prices by only one-third of the level of inflation this year.

“This means that operators have clearly been absorbing much of these increased costs to avoid frightening off increasingly edgy customers with significant price rises,” he said.

Backman added that despite food costs levelling out, operators still need to do what they can to mitigate cost increases.

“We are still in a period of economic instability and, while the eating out market has yet to be significantly hit, the run-up to Christmas could see consumers tightening their belts even further,” he warned.

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By Kerstin Kühn

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