Foodservice operators face 2% spike in supply prices: Foodservice operators and caterers are on the front line of rising inflation, supply chain expert Prestige Purchasing has warned. While the latest Consumer Price Index (CPI) figures indicate prices more than 2% lower than last year, the Foodservice Price Index (FPI), published by Prestige Purchasing and CGA Strategy, has found the foodservice sector is experiencing supply prices almost 2% higher than last year. The Foodservice Price Index (FPI) was independently developed by Prestige Purchasing and CGA Strategy specifically for the foodservice and catering sector as a more accurate and relevant alternative to the government’s Consumer Price Index (CPI). FPI analysed over four million lines of data points a month over the last two years which allows foodservice operators to more accurately track their performance versus food inflation. In comparing CPI to FPI finds, the inflation gap has increased 2% in the past 12 months, as agricultural and political factors have hit supply, and aggressive supermarket discounting continues, suppressing CPI figures. David Read, chief executive of Prestige Purchasing, said: “Despite what CPI is showing, we’re seeing a noticeable rise in inflation for foodservice operators, and the widening gap between CPI and FPI is one of the many huge challenges operators are facing. While consumers are protected somewhat by the continued supermarket price wars, political and agricultural supply issues have led to a ‘perfect storm’ which are driving prices up. For some contract caterers this problem is further compounded by clauses that benchmark budgets to CPI. Our message to those that do have these clauses, is to review them immediately and link them to the true cost of supply for operators. There has never been a time when more accurate pricing data is needed in our industry. Looking to 2017, the Trump presidency, the triggering of Article 50, a restriction on oil production, and Russian sanctions are just some of the headline factors that will affect inflation – it is this that has prompted our organisations to collaborate and develop the only industry specific index that will allow foodservice operators to track their performance versus food inflation in our industry.” Phil Tate, chief executive of CGA Strategy, added: “It is a turbulent time in food pricing, and we are pleased to offer operators some practical help via this new Foodservice Price Index with Prestige. With so many macro and micro economic factors impacting on the food supply chain at the moment, there are significant issues for both supply- and consumer-side pricing—but smart operators will find ways to mitigate the extra costs and grow their market share. This index gives them the tools they need to track food pricing, monitor their performance and protect their margins”. Among the most affected food categories are: Salmon – Chilean supply was badly hit thanks to problems with disease, putting greater pressure on the price of salmon from Norway and Scotland. The rising Norwegian currency also means salmon is more expensive for the UK; Alcohol – imported alcohol is more expensive because of the falling pound; chocolate and coffee – demand continues to outstrip supply, which is hindered by global warming; avocados – the rise in popularity, driven by social media posts and ‘hipster’ culture has led to increased demand on a limited supply.