Overview
As part of our ongoing commitment to keeping clients informed, Enhance Hospitality produces a comprehensive Market Report each quarter. Our aim is to provide valuable insights into the key factors influencing the hospitality industry.
The report is structured into core categories, each offering analysis and commentary on significant market trends and developments. This approach ensures our clients remain well-informed and equipped to make strategic decisions.
The Q2 edition includes a general economic overview, highlighting political, technological, and social considerations, alongside detailed insights across four key areas: fruit and veg , dairy meat and poultry, and fish and seafood.
Whilst the inflation trend has been downward since January 2025 (3.9%), the most recent figure shows a more modest decline to 3.6%, indicating a slower rate of easing.
Food for Thought
Political
The Skilled Worker Visa salary threshold increased to £38,700, limiting access to overseas labour. Labour shortages are intensifying, affecting staffing, production capacity, and service levels.
National Insurance & Wage Increases: Rising NI contributions and minimum wage adjustments are adding cost pressure throughout the supply chain, contributing to modest price inflation in food and operations.
Technical
Supply Chain Digitisation: Businesses investing in digital procurement tools and inventory tracking are better positioned to manage price volatility and streamline sourcing amid market instability.
Food Production & Agri-Tech: Advances in controlled environment agriculture (e.g., vertical farming) offer opportunities for more stable pricing and UK-based supply in categories like herbs, greens, and mushrooms.
Social
Consumer Preference Shifts: Continued demand for premium cuts (e.g., beef steaks) and seasonal, health-conscious options (e.g., white fish, berries) despite rising prices. Increasing interest in local sourcing, sustainability, and ethical supply chains, influencing buying decisions and brand loyalty.
Labour Market Pressure: Ongoing staffing shortages in hospitality are limiting capacity and increasing reliance on automation and menu simplification.
Economic Overview
Input Inflation
Prices for fresh produce remain elevated, especially for imports, due to:
- Exchange rate volatility.
- Ongoing post-Brexit import checks adding cost and delay.
- Weather-related impacts on European crop yields.
Transport & Labour
- Fuel and distribution costs remain 15–20% above pre-2022 levels.
- Staff shortages and the April 2025 rise in employer NICs to 15% are inflating handling and logistics charges.
Buyers in hospitality should stay agile in Q2 2025
- Source locally and seasonally.
- Lock in prices where possible.
- Reduce waste with smarter systems.
- Leverage provenance as a selling point.
This strategic focus will help balance quality, cost, and consumer expectations in a challenging but resilient market.
Sustainability Opportunities
- 36% of UK diners say they would pay more for meals with local, sustainable ingredients. Highlighting sourcing on menus (e.g. farm names, organic labelling) can justify premium pricing and increase customer loyalty (RSM, 2025).
Market Category Insight
Fruit & Veg
While Summer pricing is beginning to ease some costs, the overall fruit and veg market is still under pressure, driven by higher NI contributions and wage increases. As a result, average prices are up modestly by +0.5%.
Key Categories to Watch:
Soft Fruits (e.g. berries): Typically expected to fall in price over Summer, this year’s market is volatile due to weather and cost pressures. Pricing is highly mixed, with movements ranging from-20% to +16%, depending on variety and origin.
Apples: The 2025 UK apple crop is forecasted to be 11% smaller than last year’s, leading to price increases averaging +5%. Plan for potential shortages and cost increases in processed apple products and fresh retail lines.
Onions: UK-grown onions are performing well (-5%), but imported varieties are up by +10% due to overseas harvest issues.
Mushrooms: Market outlook is mixed, prices fluctuating between-2% to +5%, depending on type and growing conditions. Monitor supplier pricing closely; stable options are available but vary by region and species.
Winter Vegetables are going out of season As they transition out of season, prices are rising significantly: Cabbage (+10%), Leeks (+3%), Rhubarb (seasonal availability is declining, leading to price hikes).
These increases are likely to ease as Spring/Summer menus phase out winter vegetables. Review product usage and switch to in-season alternatives where possible.
Procurement Takeaways:
- Expect modest average price increases across the board, with notable category-level variation.
- Soft fruit and apple volatility requires close supplier coordination. Watch for fluctuations and secure supply on more volatile SKUs early in the season.
- UK-grown supply offers price stability, thus prioritise domestic sourcing where feasible.
- Shift menus to seasonal veg to avoid premium pricing on out-of-season lines.
Dairy
After a challenging 2024, the UK dairy sector is showing more optimism in 2025, though rising input costs (feed, energy, and labour) continue to apply pressure across the supply chain.
Milk: Prices are seeing a modest increase of +2.5% this Summer, reflecting seasonal demand and upstream cost inflation.
Butter: Holding steady at -1%, with some suppliers beginning to offer price reductions compared to last year’s highs. Supply is improving, and market conditions are gradually rebalancing. While milk costs are edging up, stable or falling butter prices offer some relief for bakery and foodservice buyers.
Eggs
The global avian flu crisis continues to disrupt egg production. The situation is critical in the US, with the EU facing similar pressures, leading to knock-on effects in UK pricing.
Prices are currently up by an average of 2%, and further increases are likely. Supply constraints may intensify as international shortages limit imports and tighten domestic stock. Expect continued upward pressure on egg prices through 2025.
Meat & Poultry
Beef: Prices remain elevated, with current rates up +7% year-on-year due to low cattle availability and resilient demand. Steak cuts are particularly impacted, rising by +8%, reflecting consumer preference for premium products and limited supply.
Pork: Pricing is largely unchanged (+0.1%), offering a stable, cost-effective protein option amid broader market volatility. While the sector is not without supply chain challenges, availability remains sufficient for now. Pork remains a strong candidate for high-volume or value-driven menus.
Lamb: Prices have seen a moderate rise of +0.8%, largely due to seasonal adjustments and stable domestic demand. Supply is currently healthy but may tighten toward Q3. Use lamb as a viable alternative to beef in premium or seasonal dishes.
Poultry: The poultry sector is under pressure from the global spread of avian flu, which has significantly reduced bird availability. Prices are forecasted to increase between +3% and +20% this quarter, depending on product type and origin.
Procurement Takeaways:
- Consider reformulating products to reduce egg reliance where feasible.
- Diversify protein sourcingto manage beef and poultry cost volatility.
- Explore supply chain diversification where possible.
- Capitalize on pork and lamb price stability while it lasts.
Fish & Seafood
As temperatures rise with the approach of Summer, seasonal dynamics are beginning to affect pricing across various seafood categories. Notably, salmon prices have decreased by an average of 2%, driven by increased harvesting activity as farmers bring more fish to market in anticipation of peak seasonal demand. However, this downward pressure on prices may be short-lived. Supply levels are expected to tighten later in the season, and continued strong demand could stabilize or reverse this trend.
In contrast, haddock (+2%), seabream (+5%), and sea bass (+6%)are experiencing notable price increases, particularly for smaller-sized fillets.
This is attributed to a combination of factors:
- Tighter supply: Quota constraints and variable catch conditions have reduced availability.
- Strong consumer demand, particularly for lighter white fish during warmer months.
- Rising operational costs, including wage inflation in harvesting and processing sectors.
One of the most pressing challenges is a severe shortage of skilled labour, exacerbated by recent changes to the UK’s immigration rules. The significant increase in the salary threshold for Skilled Worker Visa, from £26,200 to £38,700 has made it economically unfeasible for many fishing & seafood processing businesses to hire foreign workers. Given the sector’s historic reliance on overseas labour, particularly in processing hubs and on-board operations, this has resulted in vessel closures, reduced throughput in processing facilities and increased operational costs.
Procurement Takeaways:
- The patterns show a clear volatility and species-specific dynamics within the seafood market, so remain alert to shifts in availability and pricing.
- Warmer weather, inflationary pressures, and labour constraints continue to reshape the seafood supply chain through the Summer months.
- Capitalize on salmon price stability while it lasts.
Summary & Key Takeaways
Fruit & Veg
- Soft Fruits: Prices volatile (-20% to +16%). Secure supply early on high-risk SKUs.
- Apples: UK crop down 11%. Expect +5% price increase and plan for shortages.
- Onions: UK supply down -5%, imports up +10%. Prioritise domestic sourcing.
- Winter Veg (Cabbage +10%, Leeks +3%, Rhubarb): Transition to in-season alternatives to avoid price hikes.
Dairy
- Milk: +2.5% increase due to input cost inflation.
- Butter: Stable (-1%) with improving supply. Lock in lower prices where possible.
- Eggs: +2% and rising due to global avian flu. Secure supply and consider egg-reduced formulations.
Meat & Poultry
- Beef: Up +7% (steaks +8%) from limited supply. Diversify menus to reduce cost exposure.
- Pork: Stable (+0.1%). Reliable, cost-effective protein.
- Lamb: Mild increase (+0.8%). Viable alternative to beef.
- Poultry: Prices rising +3% to +20%. Lock in supply early and monitor avian flu impact.
Fish & Seafood
- Salmon: -2% due to seasonal supply increase. Prices may rebound, secure contracts ahead.
- White Fish (Haddock, Seabream, Sea Bass): rising prices due to limited supply and demand.
- Labour Shortages: New immigration rules constrain processing capacity, increasing costs.
Key Procurement Takeaways
- Monitor volatility in soft fruits, apples, poultry, and seafood.
- Prioritise UK-grown produce and stable proteins (pork, lamb).
- Shift menus seasonally to manage produce costs.