Foodservice Equipment Reports

Wholesale Food Prices Fall, Retail Food Prices Rise Slightly In October

Many observers of the foodservice market are concerned about the potential impact of rising food and other commodity prices on the nascent recovery in foodservice operator sales. As Joe Pawlak, v.p. at Technomic Inc., told us last week, “There is increasing concern on commodity pricing going forward, which could change the game tremendously, as value pricing has been driving volume in the industry over the past two-and-a-half years.” He also cautions to keep an eye on gasoline prices.

In this light, it was comforting to see overall wholesale food prices dropped 0.6% in October, with prices for so-called “finished foods” down 0.1%, seasonally adjusted, according to the Producer Price Index data released Nov. 16 by the Bureau of Labor Statistics. Retail food prices, charted in the Consumer Price Index, showed only moderate gains, with menu prices up only 0.1%, following two consecutive months of 0.3% gains. Grocery-store prices were flat, following a 0.3% gain last month.

But the National Restaurant Association notes in its “Restaurant Trendmapper” analysis that overall wholesale food prices have risen 5% in the past 10 months, already more than wiping out the record-tying 3.8% drop registered for the 12 months of 2009.

By the way, gasoline prices were down 1.6 cents nationally for the week ended Nov. 22, according to the U.S. Energy Information Administration, but stood 23.7 cents above this time last year, at an average $2.876 a gallon. Diesel-fuel prices were 38.4 cents higher than this time last year.

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