Grocery Inflation Holding Steady
Ongoing market volatility may be impacting the marketplace, with stubborn uncertainty about tariffs, interest rates, labor and other issues, but for July, at least, food inflation was stable. The latest Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics (BLS) shows that food-at-home prices edged down by 0.1% last month while the overall CPI edged a slight 0.2% higher.
According to the government report, three of the six main grocery indexes went down in July, while two categories posted increases and one remained unchanged. The price for dairy and related products rose 0.7% last month, fueled by 1.9% bump in milk prices. The CPI for meats, poultry, fish and eggs edged up 0.2%, driven in part by higher beef price. On a year-over-year (YoY) basis, grocery inflation was 2.2% higher than July 2024.
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Relief came in other categories. The index for nonalcoholic beverages dipped 0.5%, while prices for “other” food at home decreased 0.5% and cereals and bakery prices slid 0.2% in July. The CPI for fruits and vegetables remained unchanged during that period.
Although grocery inflation held steady at the midpoint of 2025, food-away-from home prices went up by 0.3% in July, with the index for full-service meals coming in 0.5% higher for the month.
What Other Fresh Data Shows
While the new BLS data shows that inflation is in somewhat of a holding pattern, other new metrics show that consumers remain mostly resilient in the face of other headwinds. According to July category reports shared by 210 Analytics and citing data from Chicago-based insights firm Circana, respectable Fourth of July demand fueled higher fresh meat sales, while frozen fruit sales also went up last month and cucumbers were a bright spot in the vegetable segment.
“Consumer sentiment is improving. Consumers are shopping far more often but purchasing less per trip with an eye on minimizing food waste, capitalizing on sales promotions and mixing in restaurant trips a bit more often,” summed up Anne-Marie Roerink, principal at 210 Analytics, in a LinkedIn post.
Also this week, the National Retail Federation (NRF) reported that overall retail sales grew in July as consumers looked for summer sales promotions to purchase items ahead of any fallout from tariffs. According to NRF, sales at grocery and beverage stores rose 1.43% in July on a seasonally adjusted basis compared to the prior month.
“We may be seeing growing inflationary impacts from tariffs since recent data shows price increases in commodity goods, particularly non-durables. Even with weaker job growth than many expected, consumers still have the ability to spend on household priorities as wages are growing above the rate of inflation,” observed NRF President and CEO Matthew Shay.
