Price Index

What is a Price Index?
A price index (or competitive price index, CPI) is a single number that expresses how your prices compare to a competitor or to the market as a whole, usually normalized to 100. An index of 98 against a competitor means your matched assortment is on average 2% cheaper; 105 means 5% more expensive.

Price indexes are computed from matched product pairs collected by price monitoring: for each common SKU, your price is divided by the competitor's, and the ratios are aggregated — often weighted by sales or traffic so that important products count more. Retail teams track index targets per category (for example, "index 100 or better on key value items, up to 110 on long tail").

Because it compresses thousands of price points into one KPI, the price index is the standard executive metric for price positioning and the usual trigger for repricing reviews.