Food inflation is easing — but price breaks are few and far between
Grocery shoppers have been walloped over the past year with sharply higher costs for eggs, butter, meat and other pantry basics. At last, inflation is starting to ease in supermarket aisles, though perhaps not quite enough to provide significant relief for households.
Prices for a handful of staples have dipped over the last year, according to government data. Among those items are beef, pork and fresh fruits, according to a U.S. Department of Agriculture analysis of food prices from March 2023 compared with a year earlier.
To be sure, those price declines are helping put the brakes on grocery inflation, which demonstrates some sign of easing. But they might not provide much consolation to shoppers as overall food prices continue to rise, even if they're doing so at a slower rate than in past months.
Shoppers and economists alike will get more data on inflation with Wednesday's release of the Consumer Price Index, representing a basket of goods of services, for April. Overall, the CPI is expected to show an increase of 5%, matching March's increase, according to economists polled by FactSet.
Other sources of retail data reveal grocery price hikes are starting to slow, although they still remain high. For instance, online grocery prices jumped 9.3% in April from a year earlier, compared with a 10.3% year-over-year hike in March, according to the Adobe Digital Price Index.
"Prices are still quite elevated — we are talking about 9.3% growth on top of the inflation we've already seen," Vivek Pandya, lead analyst at Adobe Digital Insights, told CBS MoneyWatch. "We saw online prices peak at 14% in September of last year, and we've been cooling since then."
Grocery inflation is easing partly as some food items that had been quite elevated, like eggs, are starting to fall, he added. And suppliers are working around issues that impacted the global food industry, such as the war in Ukraine.
Penny-pinching
Shoppers, in turn, are turning to penny-pinching strategies to help them cope with higher grocery costs.
Some consumers are cutting out organic foods from their carts and turning to cheaper, nonorganic items, Pandya noted. Others are buying in bulk, sometimes spending $500 or more on a shopping trip, in order to lock in prices before they go up even higher, he added.
"They are shifting to cheapest products in any category," he added.
In early April, about 30% of Americans said they didn't always buy the kinds of food they wanted, even though they had enough to eat, according to the U.S. Census Household Pulse survey. That's a 9 percentage point increase from a year ago, when 21% said they didn't always have the food they wanted.
Tough choices due to high grocery prices could stick with shoppers for months, with the Department of Agriculture forecasting that prices could rise anywhere between 4.4% to 8.8% this year — much higher than the two-decade historical 2.5% inflation rate for supermarket food.
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Price drops
Shoppers are getting breaks on a few grocery items that are witnessing price drops. Among them are beef and veal, which have dipped 1.9% from March compared with a year earlier, and pork, which has declined 0.6% over the same period. Fresh fruits have decreased 1.5% in price compared with a year earlier, the Agriculture Department said in an analysis of CPI data.
Month-to-month, food prices rose 0.35% between March to April, a dip from the 0.54% increase from February to March, noted data aggregator Truflation.
Groceries are "still rising due to high labor and transportation costs," Truflation said in an email. "This marks another increase from already elevated levels, hurting the wallets of the average American."
