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Falling prices for fresh produce and dairy brought modest relief to hospitality businesses in May
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Why restaurants are finally paying less for some everyday ingredients
Jul 04, 2026
- UK hospitality food and drink prices fell 0.1 per cent in May, ending April's inflationary uptick.
- Lower prices for vegetables, dairy and cooking oils helped ease overall costs for restaurants and cafés.
- Coffee, fish, chocolate and soft drinks continued to face inflationary pressure driven by global supply challenges.
UK hospitality food prices edged lower in May, giving restaurants, cafés and pubs a small break after costs rose the previous month. However, industry experts say businesses should not assume the pressure is over, with several key ingredients still becoming more expensive because of global supply and weather-related risks.
According to the latest Foodservice Price Index published by NIQ and Prestige Purchasing, food and drink prices across the hospitality sector fell by 0.1 per cent compared with April. The slight decline suggests supply chains have remained resilient despite continued uncertainty in global commodity markets.
Cheaper vegetables, milk and oils offer some relief
The biggest price falls during May came from fresh produce, dairy products and cooking oils.
Vegetable prices continued to decline as Europe's main growing season improved supplies of salads, leafy vegetables and other outdoor crops. Strong domestic milk production also helped bring down the cost of milk, cheese and eggs, while intense competition among retailers kept prices in check despite fluctuations in global dairy demand.
Cooking oils and fats also became slightly cheaper after weaker global demand softened prices for palm and soybean oil.
Shaun Allen, chief executive of Prestige Purchasing, reportedly said the modest fall in prices would provide some welcome relief for hospitality operators. He added that lower costs for dairy and vegetables reflected strong domestic supply and effective forward-buying strategies, as quoted in a news report.
Not every menu item is getting cheaper
While some food categories eased, inflation continued to affect several everyday products.
Soft drinks, jams, syrups and chocolate remained under pressure as higher crude oil prices encouraged Brazilian producers to divert more sugarcane towards ethanol production rather than sugar exports, tightening global sugar supplies.
Coffee, tea and cocoa prices also continued to rise as irregular rainfall in major producing countries, including Brazil and Vietnam, combined with low global stock levels to keep prices elevated.
Fish prices showed little sign of easing either, with strict North Atlantic fishing quotas and higher operating costs continuing to limit supply.
Allen reportedly warned that businesses should not become complacent despite the latest figures. He said elevated energy prices, structural supply issues and increasingly frequent extreme weather events could still disrupt food markets during the second half of the year, as quoted in a news report.
With the summer trading season underway, the latest figures suggest hospitality businesses are entering a period of greater price stability. However, ongoing global pressures mean operators are likely to remain cautious about food costs in the months ahead.
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