Grocery Inflation Holding Steady
When it comes to food and beverage inflation, no news is good news – or at least, a flat month-over-month rate. According to the latest Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics (BLS), the food-at-home index and overall food index were unchanged in February.
While the rate ultimately averaged out to 0%, there was some movement within food at home areas. Three of the six grocery indexes declined last month: dairy was down 0.6% and both the fruits and vegetable and nonalcoholic beverage categories dipped 0.2% during that time span. Evening it out, the CPI for cereals and bakery went up 0.5% and meats, poultry, fish and eggs ticked up a scant 0.1%. The “other” food at home segment remained unchanged.
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Such stability was emphasized by Andy Harig, VP, tax, trade, sustainability and policy development for FMI - The Food Industry Association. “As we look at prices for early 2024, there is welcome news for consumers as February CPI data suggests a continued easing of inflation,” he said.
Harig also put the up-and-down movement within grocery categories into context. “The effort to return inflation to historical levels of 2% was always going to be a marathon rather than a sprint, and today’s release demonstrates that there is still some race to be run and work that needs to be completed in terms of overall inflation,” he asserted.
Industry analyst Matt Pavich, senior director of strategy and innovation at Revionics, an Aptos company, said that the news is even more welcome upon a closer look at the data. “While it varies by category, the recently released CPI showed food prices remaining flat at 0.0% for the first time since the beginning of inflation over two years ago. If one considers the impact of highly pathogenic avian influenza on eggs and removes that category - grocery prices actually came down in February - signaling better pricing for consumers on the horizon,” he noted.
The year-over-year rate is another sign of easing volatility. On a 12-month basis, grocery inflation came in at 1%, compared to the 4% rate for food away from home and the 3.2% overall rate.
Tony Sarsam, CEO of Michigan-based food solutions company SpartanNash, spoke out on inflation this week, telling Bloomberg Markets that grocery prices are indeed moderating. “Food at home has stabilized and now it is at the point where most months it's actually lower overall than other things people would buy and lower than restaurants as well,” he said. “As we think about that, we are still very, very serious on making sure that we do our part to maintain accessible nutrition for people at home and making sure that we are focused on getting the right price point and the right compelling offers they need to take care of their families.”
Although food-at-home prices are settling, the overall CPI for February went up 0.4%, slightly up from the 0.3% hike in January. The bump was driven by higher prices for shelter and gasoline.
