Foodservice Equipment Reports

Last Week’s Retail Sales And Wholesale Price Numbers Misleading For Foodservice

If you just saw the top line numbers for retail sales and the Producer Price Index, reported by the Bureau of the Census on April 12, you may have thought sales and wholesale prices fell in March.

In fact, foodservice and drinking place sales rose a seasonally adjusted 0.7% compared with February, the first gain this year after sales hit a record high in December. Overall retail sales fell 0.4% and 0.6%, excluding motor vehicles and parts. The National Restaurant Association called it “a solid gain,” though they also noted the cumulative increase for the first quarter remained below the December high, suggesting “the impact of the payroll tax is still being felt.” For the 12 months ending in March, foodservice sales rose 4.3%.

The NRA and other research groups that follow restaurant sales and traffic have noted that weather, as well as consumer confidence and spending, have affected trends in the first quarter. Black Box Intelligence also noted a gain in same-store sales in March, according to a report in Nation’s Restaurant News last week.

On the wholesale price front, overall prices for finished goods dropped 0.6%, thanks in part to a 3.4% decline for energy. That’s the number most media outlets report. But the NRA calculates overall wholesale prices—including prices at the intermediate and crude levels—rose 0.2% and the overall for food jumped 0.7%, the biggest gain since November. At the finished level, food prices rose 0.8%, following a 0.5% drop in February. Wholesales food prices also rose at the intermediate and crude levels.

Much of the gain at the finished level for foods was a result of a big jump in prices for fresh vegetables, a highly volatile category. Beef prices rose 1% while prices for pork and processed poultry fell. More worrisome was a 0.6% gain in prices for prepared animal feeds at the intermediate level and big jumps in the price of slaughter chicken and cattle at the crude level. Most observers expect prices for proteins, including meats, poultry and dairy products, to rise this year as the effects of higher feed costs from last year’s drought work their way through the market.

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