Food and drink prices in the UK hospitality sector slipped slightly in May, signalling a rare moment of mild deflationary pressure amid an otherwise persistent inflationary backdrop across global food markets.
According to the latest Foodservice Price Index from NIQ and Prestige Purchasing, prices fell by 0.1% month-on-month, suggesting a period of stabilisation following a modest uptick in April.
The most notable easing came in fresh produce, particularly vegetables, where improved European growing conditions boosted supply of salads and leafy crops. The seasonal shift helped reinforce a broader downward trend in the category.
Dairy also saw softer pricing, with milk, cheese and eggs benefiting from strong domestic milk production and competitive retail dynamics that helped keep wholesale costs contained despite uneven global demand.
Meanwhile, oils and fats recorded a slight decline, reflecting weaker international demand for palm and soybean oil alongside softer global commodity conditions.
Despite the headline dip, several categories remain under upward pressure.
Prices for soft drinks, jams, syrups and chocolate continue to be affected by volatility in global sugar markets. Analysts point to firmer energy prices and shifting Brazilian sugarcane production towards ethanol as key factors tightening supply.
The coffee, tea and cocoa segment also remained inflationary, with adverse weather patterns in major producing regions such as Brazil and Vietnam restricting output and keeping inventories tight.
Fish prices also remain elevated due to quota restrictions in North Atlantic fisheries and higher operating costs across both wild capture and aquaculture supply chains.
The data highlights a split picture for UK hospitality operators: easing input costs in some core categories are providing limited relief, but structural inflation in globally traded commodities continues to weigh on menus and margins.
While the slight monthly decline suggests supply chains are adapting to earlier shocks, analysts warn that volatility in energy, climate conditions and agricultural policy will continue to shape pricing trends in the months ahead.
Shaun Allen, CEO of Prestige Purchasing, said: “A month-on-month drop of 0.1% in May provides a welcome, albeit slight, reprieve for hospitality operators.
“The deflation we are seeing in key domestic categories like dairy and vegetables is a testament to strong local supply and the effectiveness of forward buying strategies. However, operators cannot afford to be complacent.
The global energy markets remain elevated, directly impacting sugar and beverage costs through ethanol diversion, while structural supply issues continue to plague fish and coffee. As we head into the crucial summer trading period, extreme weather events across major growing regions remain the most significant risk factor.
“Procurement teams must remain vigilant, leveraging this period of relative stability to secure supply lines against potential climate-driven volatility in the second half of the year.”
Reuben Pullan, senior insight consultant at NIQ, said: “At a time of exceptionally high costs for hospitality, any signs of stability in food and drink prices are welcome. However, many commodities remain at risk of volatility, and sustained deflation seems unlikely.
“Businesses across the sector are working relentlessly to sustain sales and profits at the moment, with thousands now very fragile. As we enter the second half of 2026 and await a new Prime Minister, many will be hoping for targeted and meaningful industry support for this persistent cost burden.”
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