Food and drink prices in the UK hospitality sector continued their upward trajectory in September 2025, with the Foodservice Price Index (FPI) reaching a record high of 151.1. This marks the sixth consecutive month of rising wholesale prices, underscoring ongoing inflationary pressures that are impacting a broad range of product categories essential to the hospitality and foodservice industries. The monthly increase of 0.7% from August, although smaller than previous rises, reflects persistent cost pressures despite some mixed signals from global commodity markets.

The most significant inflation was observed in the oils and fats category, which surged by 2.9% month-on-month. This increase was driven by tight global supplies of high-demand items such as sunflower and rapeseed oils, offsetting minor declines in palm and soybean oil prices. Bread and cereals also saw notable price inflation of 1.6%, primarily due to high domestic operational costs including energy, packaging, and labour. These factors largely negated any relief from softer global grain prices, leading to sustained high prices for bakery products in the UK market.

Additional inflationary pressures were evident in other categories. Fish prices rose by 1.4% due to limitations on whitefish quotas, while adverse summer weather conditions, including heat stress and water shortages, contributed to a 0.5% rise in vegetable prices. Conversely, some relief was noted in the mineral water, soft drinks, and juices sector, where prices contracted by 0.4%. Coffee, tea, and cocoa prices climbed by 1.4%, driven by tightening supplies, despite a significant drop in global cocoa futures.

These inflationary trends come against a wider backdrop of elevated costs in other key operational areas, such as energy and labour, which compound the pressures faced by hospitality operators. Shaun Allen, chief executive of Prestige Purchasing, highlighted that while some commodity markets like cocoa offer temporary relief, increased domestic costs are driving price rises in critical categories, urging operators to focus on resilience and strategic sourcing in this uncertain environment.

Industry analysts also emphasise the strain these price increases place on hospitality margins, with the sector facing squeezed profits as menu price hikes prompt consumers to reduce out-of-home spending. CGA by NIQ senior insight consultant Reuben Pullan expressed hope that increased consumer spending during the festive season could provide some respite but warned of ongoing inflation challenges in 2026.

The hospitality sector's inflationary pressures mirror broader trends in the UK economy, where grocery inflation showed a slight easing to 4.9% in early September 2025 but remained a significant concern. According to data from Worldpanel by Numerator, the slow decline provided limited relief to consumers burdened by high prices, with food items such as chocolate, fresh meat, and butter experiencing the fastest price increases. Rising employer taxes, higher wages, and regulatory costs alongside commodity price hikes are cited as primary drivers of these inflationary trends.

Retail price data from the British Retail Consortium (BRC) also indicate that shop prices surged at their fastest pace since early 2024, with food prices increasing by 4.2% year-on-year in September 2025. The BRC has warned that additional costs, including a new packaging levy coming into force in October and increased social security contributions, may further exacerbate inflation. These developments fuel concerns over how households will manage rising food costs amid ongoing economic challenges.

Looking ahead, industry projections from the Institute of Grocery Distribution suggest UK food inflation could range between 2.4% and 4.9% in 2025, as new government measures including increased National Insurance contributions and minimum wage rises take effect. Post-Brexit trade changes and higher packaging costs are also expected to push prices higher. While food price inflation had dropped significantly from its peak in 2023, these emerging factors threaten to reverse gains made, with only a portion of added costs likely to be absorbed by the food sector, pass-through to consumers appears inevitable.

Historic data from 2023 offers some perspective, showing that certain categories like mineral waters and juices had experienced easing inflation following earlier sharp rises, whereas fish prices had been trending upwards, driven by supply constraints. The Food and Drink Federation’s 2023 survey highlighted continued sector-wide cost pressures, with significant inflation in products such as sugar and olive oil, reflecting the complex inflationary environment food businesses have navigated in recent years.

Overall, the latest figures confirm that sustained inflationary pressures, driven by a combination of global supply tightness and increasing domestic costs, continue to challenge the UK hospitality and foodservice sectors. Operators must adapt strategically to a landscape where cost rises are likely to persist into next year, influencing business decisions and consumer behaviour alike.