Food and drink prices in the hospitality sector remained nearly unchanged in January, with month-on-month inflation slowing to just 0.02%, according to the latest Foodservice Price Index from NIQ and Prestige Purchasing.
This slowdown brings much-needed stability for operators after a sharp price increase during December’s festive season.
Categories that saw price stabilisation include oils and fats, where prices have decreased month-on-month, providing relief to domestic supply chains.
There was also a slight reduction in the bread and cereals category, and prices for meat and poultry remained stable as demand cooled post-Christmas and global supply conditions improved.
Importantly, the severe inflationary pressures that impacted the sugar, jam, syrups, chocolate, and coffee, tea, and cocoa categories throughout 2024 and 2025 have begun to alleviate. Global cocoa futures have fallen to multi-year lows, influenced by better harvests in West Africa and rising global inventories.
While it may take time for this reduction in raw commodity prices to fully affect processed products, this downward trend signifies a crucial turning point for the sector.
However, the Index indicates that inflationary pressure has not disappeared completely. Seasonal and structural challenges pushed fresh produce prices higher in January. High energy costs for glasshouse-grown berries in Europe have affected fruit prices, and there was a 30% drop in Spanish lemon volumes. Some vegetable categories also experienced seasonal tightening, although overall supply remains more robust than in the same period last year. Meanwhile, the fish category continues to face significant pressure, with cod prices reaching record highs due to severely restricted quotas.
Shaun Allen, CEO of Prestige Purchasing, said: “Seeing month-on-month inflation flatten to just 0.02% in January is a highly encouraging start to 2026. The unwinding of the cocoa crisis and the sharp drops in oils & fats provide much-needed breathing room for the hospitality sector after a punishing December. However, operators must remain vigilant. With fresh produce still climbing and foundational costs like energy and labour acting as a floor on pricing, true deflation across the board remains elusive. Strategic sourcing will be vital to capitalise on these falling commodity markets.”
Reuben Pullan, senior insight consultant at NIQ, said: “After relentless inflationary pressures in 2025, hospitality operators will have been relieved to see pricing stabilise in many areas of food and drink in January. Nevertheless, the market remains vulnerable to micro pressures in supply. With other key costs like labour and taxation so high, there is no room for complacency on pricing and businesses will have to be braced for more volatility in 2026.”
