Food prices are going up, up, up. Inflation is tough, tough, tough.
The Bureau of Labor Statistics on Friday reported that food-at-home prices rose 11.9 percent over the last 12 months, the largest increase since April 1979.
Categories experiencing the largest price hikes were typically meal staples.
Among categories seeing notably high inflation in May were eggs, up 32.2 percent year over year; butter and margarine, 20.2 percent; chicken, 17.4 percent; citrus fruits, 16.1 percent; milk, 15.9 percent; coffee, 15.3 percent; ground beef, 13.6 percent; baby food, 12.9 percent; and rice, pasta and cornmeal, 12.8 percent. Food-away-from-home prices rose 7.4 percent.
Rising food, energy and shelter prices caused U.S. inflation to surge to a new four-decade high in May, heightening concerns over the impact on consumer spending. The nationwide average price for a gallon of gas last week topped $5 for the first time ever, according to AAA.
The inflationary pressures on food and fuel are being blamed on Russia’s invasion of Ukraine, which many fear will be a long-term conflict. China’s zero-COVID policy is also believed to have delayed the global supply chain’s recovery.
Moody’s senior economist Ryan Sweet told the New York Post that surging prices for food and fuel are costing American households an extra $460 per month based on his analysis of the inflation figures.
Kraft Heinz, Tyson and Campbell Soup as well as fast-food chains all recently warned they would raise prices, often on top of recent pricing actions, due to skyrocketing costs for labor, packaging, ingredients and transportation, according to The Wall Street Journal.
The Journal wrote, “At grocery stores, discussions with vendors about price increases are increasingly tense, industry executives said, as retailers worry they will lose shoppers from sticker shock.”
A survey of 2,000 Americans taken in early May by Harris Poll on behalf of Alpha Foods found the cost of groceries overtaking gas prices as Americans’ top inflation concern, according to CNBC.
Asked what they were doing to combat food inflation, the top response from consumers was taking fewer trips to the grocery store, cited by 52 percent; followed by shopping generic brands, 45 percent; entertaining at home instead of going out, 40 percent; and buying in bulk, 33 percent.
- Consumer Price Index – May 2022 – Bureau of Labor Statistics
- Food Prices to Keep Going Up, as Costs Surge – The Wall Street Journal
- Inflation costing Americans an extra $460 per month, analysis says – New York Post
- Consumers changing eating, shopping habits as inflation pushes up prices – CNBC
- Food-at-Home Inflation Hit 11.9% in May – Winsight Grocery Business
- US consumers contend with double-digit price increases at the grocery store – CNN
- Grocers fret over how to pass higher costs onto customers – RetailWire
- Supply chain outlook still ‘pretty severe,’ economist says – Yahoo Finance
- New report suggests supply chain resilience under more strain than ever as commodity prices and inflation soar – Packaging Europe
DISCUSSION QUESTIONS: What’s the obvious and less obvious fallout from ongoing food inflation on the grocery channel? Should grocers revisit their inflationary playbook at this point and make adjustments in strategy?