Food Prices Down, Menu Prices Flat, Gas Prices Up A Bit

Wholesale food prices fell for the second consecutive month in May, easing concerns that the run-up in the key cost component for most operators other than labor would begin to crimp operators’ ability to discount while sales remain sluggish, and undermine margins.

At the finished foods level, prices were off 0.6%, following a 0.2% drop in April. Still, the declines come on the heels of eight consecutive months of increases—prices were up 2.4% in March—which has more than wiped out the near-record declines in wholesale food prices seen last year. Those declines allowed many operators to remain profitable while experiencing record sales declines. Using a total wholesale food number (factoring in food at the intermediate and crude levels), the National Restaurant Association reported food prices are up 4.9% year-to-date including the declines in April and May.

On the consumer side, the food-away-from-home component of the Consumer Price Index rose a mere 0.1%, the sixth month in the last seven that have seen only 0.1% gains. The menu-price increase marker was flat in March. For the past 12 months on a seasonally unadjusted basis, food-away-from-home prices have risen only 1.1%, by far the lowest 12-month period on record.

Finally, gasoline prices continue to remain essentially stable, a pattern that has been in place for nearly a year. Prices were up a bit over three cents a gallon in the week ending June 21, but are only three cents higher than this time last year. Gas prices have not experienced their usual run-up during the peak summer driving season this year.