America’s grocery bills are surging and there’s no relief in sight
Within grocery, steaks have seen the highest price jump annually, costing 24.9% more in October than they did a year ago. Eggs were 11.6% more expensive in October than a year ago, chicken cost 8.8% more, cereal was 5% more expensive, and baby food prices grew 7.9% annually.
Grocery prices stagnated from 2015 through 2019, but have increased during the pandemic. In 2020, grocery prices increased 3.7% from the year prior.
Food manufacturers and grocers have faced higher costs for commodities, labor, transportation and other expenses during the pandemic. Those costs have escalated in recent months, leading manufacturers to pass off some of these costs to their retail customers, who in turn have passed on a portion to consumers.
The producer-price index, which measures the price manufacturers receive for their goods and services, jumped 0.6% last month from September and rose 8.6% annually.
Companies are also pulling back on discounts on many items at stores because demand is strong and they don’t want to run out of their limited supplies of goods.
“We continue to face accelerating levels of extraordinary inflation,” Tyson said in a letter to retail customers last month in which it announced it would be raising prices next year on brands such as Ball Park hot dogs and Jimmy Dean frozen breakfast. “The sustained duration and significant impact of the inflation necessitates additional pricing action.”
Market research firm IRI projects that inflation on food, beverages and household basics will climb to 8% during the first half of 2022 before settling at 4% during the latter half of the year. IRI tracks prices, point-of-sale and volume data, promotions and trends at big-box stores, wholesale clubs, supermarkets, pharmacies and other channels. The firm also consults with some of the largest retailers and brand manufacturers in the United States and conducts consumer surveys.
Squeeze on low-income customers
While higher prices for food are impacting families across the country, low-income shoppers get hit hardest when essentials become more expensive. These consumers have less disposable income and already spend a bigger share of their wallet on essentials than wealthier consumers.
“Families that have to spend a higher share of…
Read More: America’s grocery bills are surging and there’s no relief in sight