Food costs experience slow down

19th September 2008, 12:10pm

Food costs for foodservice operators are finally seeing a slowdown, suggested foodservice analyst Peter Backman, managing director of Horizons.

In August, food costs rose by 0.8%, meanwhile July experienced a hike of 3.1%.

This slowdown in the rate of growth is due to several factors such as the stability of the pound against the Euro, and the fact that there has been a good harvest for some commodities. 

The price increases for fresh fish and vegetables were also well below the average last month.

Backman commented: "While foodservice operators increased their food prices to consumers  slightly in August, since the beginning of the year they have raised prices by one-third of the level of food price inflation.

"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 advised: "Despite food costs levelling out, operators still need to do what they can to mitigate cost increases such as reducing portion sizes, buying more cost-effectively and using cheaper cuts of meat, for example. 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."

Related Articles:

• 10 Jun 2009 - Eating out is falling after hitting new high

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