Red roses and erring kippers: The CSO has changed some of the eggs in its retail price index shopping basket. Robert Chote reports

KIPPERS, stockings and spark plugs have been kicked out. Peaches, leggings and boat trips on the Norfolk Broads have come in. But romantics can rest assured: sending a single red rose to Watford stays in for the fourth year running.

The Central Statistical Office yesterday announced its annual reshuffling of the retail price index its best guess at the typical 'shopping basket' of goods and services bought by the average household.

The RPI combines the prices of these goods and services to give a single figure for the overall price level. This is then used to calculate the rate of inflation - the change in the index over a 12-month period.

The make-up of the RPI provides an annual snapshot of spending habits. The goods included, and the relative importance ascribed to them, are derived from the annual Family Expenditure Survey, in which 7,000 households throughout the country are asked to record what they spend in a given fortnight and to give details of big purchases over a longer period.

Items are brought into or dropped from the index once a year to reflect changes in the goods and services people buy. The importance each item has in the index - its 'weight' - reflects the proportion of household spending it typically accounts for.

Over time, these weights change as tastes and fashions alter and as price movements encourage people to buy more of one good or less of another. The second graphic shows how the weights of five broad categories of spending have changed during the last 30 years.

As people have become more affluent, the proportionate amount they spend on basics such as food have fallen, while electrical goods, travel and leisure have taken up a growing share of the family budget.

This year, mugs have replaced cups and saucers and hair highlighting has ousted the shampoo and set. Microwave ready-meals, wine bought in restaurants, vets' fees, contact lens solution, camcorders, computer disks and satellite television subscriptions have all come into the index.

Jam doughnuts, canned fruit cocktails, fan heaters, men's vests and dustpans and brushes have all been dropped, however.

The biggest change to the index this year is the introduction of holidays spent in Britain, which are assumed to comprise 0.8 per cent of the family budget. Foreign holidays were introduced in 1993 and account for 2.9 per cent, a large part because they are more expensive.

The ins and outs of the RPI in recent years demonstrate the rising affluence and sophistication of consumers, technological advances, the growth of convenience shopping and international travel.

Additions in recent years have included muesli, condoms, compact discs, hammer drills, self-assembly furniture, multi-vitamins, bottled lagers, continental quilts, disposable nappies, computer games, rainbow trout, mascara, nursery school fees and skiing trips to the Alps.

Lard, mangles, sanitary towels, tinned rice pudding, net curtain material, fan-belts, mackerel, black and white televisions, sterling silver St Christopher medals and visits to the sauna have all been dropped.

During 1994 the average family is expected to spend just under pounds 290 a week, up from just under pounds 285 in 1993. The biggest change in the family budget over the past year has been spending on leisure services, such as holidays, theatre tickets and television licences, which has risen by 14.8 per cent to pounds 20.56 a week.

Weekly spending on leisure goods, including compact discs and gardening products, has risen by 7.9 per cent to pounds 13.85. Spending on tobacco shrank most quickly, down 7 per cent to pounds 10 a week.

But not all households spend these 'typical amounts'. In the past year food prices have risen 0.5 per cent, clothing prices by 2 per cent and motoring costs by 6.6 per cent. So a household of fashion-conscious dieters would be more affected by inflation than the typical family; the reverse would be true for a household without a car.

The spending of the richest 4 per cent of the population - those with a pre-tax income of around pounds 40,000 a year or above - is excluded when the RPI is compiled, so that expensive items most people never buy are not overrepresented.

The compilation of the RPI is a labour-intensive process. On a Tuesday in the middle of every month, price collectors from JobCentres and unemployment- benefit offices visit 180 areas around the country to collect 150,000 prices for around 500 goods and services.

Prices for a further 100 goods - newspapers, water, gas, council rents and rail fares, for example - are collected centrally, as are chain- store price lists. The price collectors are careful to visit the same shops every month and to note the prices of exactly the same products so that the index compares like with like.

As a by-product of the calculation of the overall RPI, the process also provides a snapshot of the spread in prices between different parts of the country. For example, on 18 January, 80 per cent of prices quoted for a 500 gram tub of soft margarine varied between 34p and 85p, while most draught bitter ranged in price from pounds 1.22 to pounds 1.60 a pint.

Prices are also collected for several different types of most elements, including five cuts of beef (plus mince and beefburgers) and several varieties of bread (white and brown, 400 grams and 800 grams, sliced and unsliced, wrapped and unwrapped). Pet-care products are represented by selected tinned cat and dog foods, dog biscuits, cat litter and a dog bowl.

But the CSO does not reveal the brands surveyed, so while we know that cakes and biscuits are in the index, we do not know whether Jaffa Cakes are.

The precise brand may differ according to which sells best in a particular part of the country, so one variety of cooker may be thought representative of sales in London while another would be used in Birmingham. Similarly, the type of outlet surveyed can vary between areas, reflecting the fact that small shops are used more frequently in rural areas while hypermarkets and supermarkets dominate in towns.

The choice of outlet has taken on increasing importance in recent years as retailers have cut prices aggressively to revive trade depressed by the recession.

Chain stores have been taking market share from single outlets because their financial muscle allows them to offer more generous bargains, while big discounts are also offered in temporary shop sites and sales of bankrupt stock. Some economists believe the RPI is overstating the overall price level and inflation rate because discounting outlets are under-represented.

The composition of the index has also evolved, in part to reflect the greater convenience people demand when buying the same goods. This year 2-litre bottles of mineral water have replaced 1.5-litre bottles. Last year pre-packed red potatoes replaced loose red potatoes.

What of the future for the RPI? The days of sending a single red rose to Watford may also be numbered as an item in the index: the statisticians who compile the RPI are moving from there to London.

(Photograph and tables omitted)