Source: Sharecast
The latest Foodservice Price Index showed that prices fell 1.4% month-on-month in March. While the conflict in the Middle East began at the start of the month, the impact of the subsequent energy crisis took a while to trickle through to consumers in the UK.
Deflation was primarily a result of the delayed transmission of costs in UK supply chains, NIQ said, while seasonal buying of fresh vegetables and effective forward-buying strategies temporarily shielded the domestic market from broader global volatility.
"However, with many international markets now volatile, global benchmarks across all major commodity groups, like cereals, meat, dairy, vegetable oils and sugar, are now rising simultaneously," the report said.
Meanwhile, the energy crisis – with oil prices soaring to their highest in four years last month on supply disruptions – is likely to spark high inflation across the sector. Rates for freight, packaging, agricultural inputs and energy-intensive manufacturing have already jumped, which will lead to an acceleration in wholesale price inflation ahead of the summer, NIQ said.
“A softening of food and drink inflation has been a rare bright spot for hospitality in early 2026, but the benefits will almost certainly be short-lived," said Reuben Pullan, senior insight consultant at NIQ.
"Oil shocks and geopolitical uncertainty are storing up some seismic shocks in energy-related prices, and businesses and consumers alike will have to steel themselves for yet more price rises as the year goes on."