Foodservice Equipment Reports

Wholesale Food Prices Fall Again While Menu Prices Keep Rising

Wholesale food prices fell for the sixth consecutive month in April, but restaurant operators pushed menu prices up yet again.

Wholesale food prices dropped 0.9% at the final demand stage last month, according to Producer Price Index data from the U.S. Bureau of Labor Statistics. A drop in pork prices was cited as a factor in the decline, though the BLS noted that prices for fresh and dry vegetables increased. Foods and feeds prices at the intermediate level dropped 1.7% while prices of unprocessed foodstuffs and feedstuffs rose half a point.

The National Restaurant Association had yet to post its averaging of wholesale food prices at the three levels as we went to press. But last month, it noted that food prices at the wholesale level were negative over the past 12 months.

The drop in wholesale food prices is driving consumer prices at grocery stores lower. Food-at-home prices fell for the third month in the past four, down 0.1% in April. For the past 12 months, grocery-store prices have risen only 1.3%. But restaurateurs continue to raise menu prices, in part because beef prices remain elevated. Menu prices were up another 0.2% last month and the 12 month gain reached 2.9%.

The disparity between falling wholesale food prices and rising menu prices should help operator margins and, thus, the amount of monies available for capital spending. 

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