Foodservice Price Index launched

Foodservice Price Index launches to provide the hospitality industry with more accurate view on pricing trends

Foodservice operators will be able to access more relevant information on food price trends from December 2015, thanks to an exciting new joint venture from Prestige Purchasing and CGA Strategy, the business intelligence and networking platform.

The Foodservice Price Index (FPI) has been developed as a more accurate and relevant alternative to the government’s Consumer Price Index (CPI), which until now has been the only inflation index available to food purchasing professionals to measure success. The FPI has now revealed that the deflationary trends in recent CPI statistics are only partially reflected in the foodservice market.

Explaining the challenge of using CPI as a measure of pricing for the foodservice industry, David Read, CEO of Prestige Purchasing explains, “While the CPI data is relevant for consumers and retail supermarkets, it doesn’t reflect prices on offer to caterers. Buyers who rely on CPI may be acting in an ill-informed manner when negotiating with suppliers. This is because the CPI is calculated using supermarket selling prices instead of foodservice wholesale prices, and we now know that these market movements are distinctly different.”

Explaining these discrepancies further, Phil Tate, CEO of CGA Strategy explains, “We’ve been through 101 million rows of historical data points from wholesalers from the last 24 months and compared them to CPI. There is a clear difference in trends between the two sectors which is mainly due to the on-going supermarket price war, generated by the increase in Discounters, Convenience and Online. This is creating a major drag on prices, which is not the situation in the foodservice wholesale market. When we spoke to Prestige Purchasing about this, we were excited about working together to create a more accurate and relevant toolbox for the foodservice world”.

Like the CPI, the FPI will be based on a basket of goods but gathered from wholesalers rather than retailers, which includes hot beverages, bread, cereal, fish, food products, fruit, meat, milk, cheese, eggs, oils and fats, soft drinks, sugar, jam, syrups, chocolate, confectionary and vegetables. It will show price fluctuations across each of these categories, as well as for the whole basket.

This will be published by CGA Strategy and Prestige Purchasing, who will also offer a range of different subscription services featuring insight and advice on how caterers can mitigate issues as they occur. In addition there is also an option for those who want a more detailed or bespoke breakdown of the index. The FPI will enable foodservice businesses, such as restaurants, hotels, bars, cafes, takeaways, travel services and caterers to make better informed strategic decisions about their procurement.

The FPI is a joint venture between CGA Strategy and Prestige Purchasing and will be officially launched at Prestige Purchasing’s food inflation event on the 14th December in London. More details on the FPI and how it can be purchased will be disclosed on the day. Spaces are filling fast; to book your seat contact [email protected].