Food prices surged by 11.5 per cent in June, the fifth consecutive month of double-digit inflation according to the latest NielsenIQ Prestige Foodservice Price Index.
All 10 food and drink categories covered in the index moved upwards year on year, with fruit, dairy and oils and fats recording inflation of more than 20 per cent. According to the index, several categories surged month on month as the impact of Russia’s invasion of Ukraine continued to have an effect on the price of key commodities.
Food prices were also being driven up by concerns over the prospect of drought in several areas of the UK following the recent heatwave. Fears farmers could be banned from watering crops this month and next, coupled with shortages of seasonal labour and poor grass quality, is taking its toll on the industry.
Client director NielsenIQ James Ashurst describes drought as the latest in a “very long line of threats” to global foodservice supply, meaning inflation is likely to remain high for some time to come.
“With consumers as well as businesses feeling a tightening squeeze on their spending, the outlook for all food and drink businesses remains challenging,” he added.
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