Inflation… it’s all around us, but what does it actually mean and how does it affect your business?
Inflation, in simple terms means no fun as we see a general increase in prices and a fall in the value of the British pound.
The outlook on inflation post-Brexit (the UK’s decision to leave the EU on 23rd June 2016) remains uncertain, however we (along with our suppliers) are already experiencing the impact of increased prices.
For example, foodservice price inflation accelerated by 6% in March 2017. The inflation rate of 6% is substantially higher than historical averages in the foodservice sector. The most significant inflation in March came in the category of fish, where prices were up by 19.9% compared to the previous year.
Compass Group have tried hard to understand this to ensure it has minimal impact on our service to you. At Compass Group our Foodbuy teams are constantly working to mitigate inflation through working with our suppliers and producers to get the very best cost for our ingredients, products and services. Whilst we work to mitigate costs it is vital to consider increases in tariffs and pricing wherever possible to help minimise the impact.
Factors which affect you over the next 12 months:
- Increased costs and reliance on imported goods has contributed to higher food prices
- Weaker British Pound (£) means food becomes more expensive for companies and consumers
- Both Consumer Price Inflation (CPI) and Producer Price Inflation (PPI) are predicted to rise
- National Living Wage is currently £7.50 for those aged over 25 years and will rise to £8.05 by April 2018
- An average 20% hike in petrol and fuel prices means the cost of living is rising fast
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