Geopolitical shocks threaten severe inflation after foodservice prices dip in March

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Food and drink prices in the hospitality sector fell by 1.4% month-on-month in March, according to the latest Foodservice Price Index from NIQ and Prestige Purchasing.

However, this easing is likely to represent momentary respite rather than sustained relief, as conflicts and energy shocks threaten to drive cost increases in the coming months.

Deflation in March was largely driven by the delayed transmission of costs in UK supply chains. Favourable seasonal transitions for fresh vegetables and effective forward-buying strategies in categories of the Index including Oils & Fats and Dairy have 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.

Conflict in the Near East has also triggered a massive spike in global crude oil prices. The energy shock is expected to be a catalyst for high inflation across the foodservice sector, with high oil prices rapidly driving up freight, packaging, agricultural inputs and energy-intensive manufacturing costs. This threatens to erase domestic deflation in the UK and dramatically inflate wholesale prices as we move towards the Summer.

Shaun Allen, CEO of Prestige Purchasing, said: “While a 1.4% drop in the Index provides some welcome, short-term relief, operators must not be lulled into a false sense of security. We are currently in the eye of the storm. The reality is that global food commodities are rising across the board, and the geopolitical situation in the Near East has sent energy markets into overdrive. The UK supply chain has shown remarkable resilience to absorb these shocks so far, but suppliers cannot hold back this tide indefinitely. Operators should view this temporary dip as a vital, rapidly closing window to lock in contracts and fortify their procurement strategies before these global pressures inevitably break through to the UK market.”

Reuben Pullan, senior insight consultant in the hospitality operators and food team at 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. 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. Hospitality remains a dynamic and adaptable industry, but this new wave of inflationary challenges will be another severe test of their resilience.”

For further information, interviews or images, contact Prestige Purchasing on 01908 222678 or stuart.read@prestige-purchasing.com.

About Prestige Purchasing

Prestige Purchasing is one of the UK’s leading specialists in procurement and supply chain management for the hospitality, catering, leisure, retail and private healthcare sectors.

About NIQ

NielsenIQ (NYSE: NIQ) is a leading consumer intelligence company, delivering the most complete and trusted understanding of consumer buying behavior and revealing new pathways to growth. By combining an unmatched global data footprint and granular consumer and retail measurement with decades of AI modeling expertise, NIQ builds decision systems that help companies turn complex data into confident action.

With operations in more than 90 countries, NIQ covers approximately 82% of the world’s population and more than $7.4 trillion in global consumer spend. Through cloud-based platforms, advanced analytics and AI-driven insights, NIQ delivers The Full View™—helping brands and retailers understand what consumers buy, why they buy it, and what to do next.

For more information, please visit www.niq.com.

This press release includes forward-looking statements that reflect NielsenIQ’s (NIQ) current expectations and projections about future market trends and consumer behavior. These statements are based on available information and reasonable assumptions but are subject to risks and uncertainties that could cause actual results to differ. NIQ does not undertake to update these statements, except as required by law.