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By Bruce Grindy, Chief Economist, National Restaurant Association

In the 12 months ending November 2023, average wholesale food prices declined 5.6%. That marked the seventh consecutive 12-month decline – and the largest year-over-year drop in more than 7 years.

The recent slowing of growth followed an 18-month period of double-digit gains – including a peak increase of 17.7% in April 2022.

While the decades-high growth rates are in the past, average food prices are still well above pre-pandemic levels. As of November 2023, the Producer Price Index for All Foods remained more than 25% above its February 2020 reading.

Although prices for many food commodities leveled off or declined in recent months, others continued to trend higher. As a result, the degree to which restaurants are experiencing relief depends on the menu mix of each individual operation.

Producer prices for beef and veal (25.6%), confectionary materials (16.2%), tea (13.3%), refined sugar (10.2%), coffee (6.4%) and soft drinks (4.5%) stood well above their November 2022 levels. In contrast, the fresh vegetables index fell 57.6% during the last 12 months, while the fresh fruits and melons index was down 6.1%.

​Until wholesale prices start trending lower across a broad range of commodities, food costs will continue to be a headwind for many restaurants.