Food and drink prices in the hospitality sector remained virtually flat in January, with month-on-month inflation slowing to just 0.02%, according to the latest Foodservice Price Index from NIQ and Prestige Purchasing.
The deceleration brings welcome stability for operators following a sharp festive surge in prices in December. Plateauing categories of the Index include Oils & Fats, where prices dropped month-on-month to bring relief to domestic supply chains. There was also a slight easing in the Bread & Cereals category and a complete flattening of price movement in Meat & Poultry, as demand cooled after Christmas and global supply balanced.
Crucially, the extreme inflationary pressures that affected the Sugar, Jam, Syrups & Chocolate and Coffee, Tea & Cocoa categories throughout 2024 and 2025 have started to ease. Global cocoa futures have dropped to multi-year lows, driven by improved West African harvests and rising global stocks. While it will take time for this raw commodity deflation to fully filter through to processed products, the downward correction marks a significant turning point for the sector.
However, the Index shows inflationary momentum has not disappeared entirely. Seasonal and structural challenges pushed fresh produce prices higher in January, with fruit affected by high energy costs for glasshouse-grown berries in Europe and a 30% drop in Spanish lemon volumes. There was also seasonal tightening in some vegetable categories, though overall supply remains more resilient than during the same period last year. Meanwhile, the Fish category is still under acute pressure, with cod prices at 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.”
