Is eating out about to get cheaper?

A fall in inflation for the first time in months offers major relief for hospitality. But what does that mean for consumers dining out?

Updated on • Written By Holly Butterfield

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Is eating out about to get cheaper?

The hospitality industry has finally received some good news in the form of falling inflation rates. 

The CGA Prestige Foodservice Index (FPI) revealed that inflation rates dropped by 1.4% in March, the biggest month-on-month fall in recent months. It also reduced the annual rate to below 10% for the first time in two years. The FPI measures prices in the food sector using data from 10.7 million transactions per month.

At the same time, the Consumer Price Index (CPI) slowed significantly, with only a 0.1% rise in March. This means that the rising price of restaurant bills is finally set to ease. 

Sky-rocketing energy and rent prices combined with rising food costs have been a major issue for hospitality in recent years, leading to calls from chefs for the government to reduce VAT costs and restaurants resorting to extreme measures, such as turning off heating, as a way of minimising expenses.


Consequently, many restaurants have had no choice but to hike up prices in order to cover their own expenses and avoid closure, putting the burden on customers to foot these hefty bills.

Reports show that London dining prices have surged in recent years, increasing by an average 10.7% in the last year alone. Whilst costs are still increasing faster than the overall 3.4% inflation rate, a further decline in food rates is predicted in the coming months, marking a major shift for the food market. 

This news comes amidst a vast number of restaurant closures as sites struggle to keep up with rising costs. Jason Atherton has recently announced that he'll be closing the doors of his flagship restaurant, Pollen Street Social, less than a year after he slashed restaurant prices to make his dining more accessible.

James Ashurst, client director at CGA by NIQ, said: ‘After two years of relentlessly high inflation, a fall into single digits in March brings some welcome respite. Along with signs of increased consumer demand, it makes us cautiously optimistic for businesses as we move further into 2024.’

In the meantime, why not check out our guide to the best cheap eats in London, for a selection of budget friendly spots. 

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