What´s all about?
- Why is food inflation happening?
- Why are prices rising in the hospitality industry?
- When will food prices go down again?
Why is food inflation happening?
It is common knowledge that food prices are currently rising continuously. According to data from the German Federal Statistical Office, prices of all food groups in Germany rose by 17.2 per cent between April 2022 and April 2023. But what causes this type of food inflation in the first place? According to Statista, the primary reasons for the high inflation rate are the rising energy prices and cost of living for consumers as well as higher production costs for companies. However, according to the consumer advice centre, besides the persistently high energy prices, the costs of fertiliser and animal feed also play a role. The situation is further aggravated by the fact that labour shortages and the minimum wage are increasing personnel expenses, which are also reflected in food prices. Food prices have been driving inflation since March 2023.
Why are prices rising in the hospitality industry?
When food becomes more expensive, restaurateurs are obviously forced to pass on the price increase to their customers. This Italian restaurant around the corner is no exception. Known for its Bolognese, the restaurant used to be in high demand. But in recent times, tables are more and more frequently left empty. Why? Because the restaurant owner has to pass on the significantly increased food prices to his guests to the lowest possible extent to avoid losing money.
What causes food price increases?
Cows need animal feed. This animal feed has to be cultivated. The cost of fertiliser and fuel is high, and climate change means lower crop yields.
Slaughtering is affected by another cost factor: personnel expenses. These have also increased due to the shortage of skilled workers and the minimum wage.
To make the beef available to customers in the store requires additional energy and personnel.
The animal feed has to be harvested, and harvesting requires energy to run the machines. These fuel costs have also increased.
The meat must then be transported in properly cooled vehicles. Refrigeration and transport require energy and fuel, and both factors have become significantly more expensive.
This is a long chain of price increases, which is ultimately reflected on the Italian restaurant’s menu.
The situation is similar with red pepper. Individual steps in the supply chain, even though it is not as long as with beef, have become more expensive, which is ultimately reflected in the product price.
👉 Red peppers are grown in greenhouses in many places. This cultivation is more expensive due to increased energy and heat costs, personnel expenses and fertiliser prices.
👉 Harvesting is associated with higher costs due to increased personnel expenses.
👉 The same applies to transport due to higher fuel costs.
👉 Selling in the store is also affected by higher energy and personnel expenses.
When will food prices go down again?
Many people are now asking when food prices will finally stop rising. Forecasts in that regard are difficult to make and are purely speculative. However, according to the consumer advice centre, the general trend is that food prices will only go down slightly. Accordingly, consumers must be prepared to spend more money on food, whether in the supermarket, in a restaurant or at the weekly farmer’s market.
Which food prices are rising the most according to the consumer advice centre?*
- Cooking fats and oils: +4 per cent
- Dairy products and eggs: +31 per cent
- Flour, bread and cereal products: +21 per cent
- Fruit: +6 per cent
- Vegetables: +14 per cent
- Meat and meat products: +10 per cent
- Fish and fish products: +20 per cent
- Sauces and condiments: +31 per cent
With its multichannel marketing strategy, METRO is focusing even more strongly on the needs of professional customers: the company accommodates its customers as much as possible with local stores, Food Service Delivery (FSD), the online marketplace and Hospitality Digital tools. 👉 Multichannel: Making shopping more convenient than ever