Grocery Inflation Remains Moderate, Yet Stubborn
Inflation is holding steady, if a bit elevated, according to the latest government data. The U.S. Bureau of Labor Statistics (BLS) reported that the overall Consumer Price Index (CPI) edged up a scant 0.2% in September, the same rate as August and July. The fact that food-at-home prices rose 0.4% – slight but still higher – during that time period is likely to keep grocery inflation in the news and in the political discourse leading up to the pivotal election on Nov. 5.
Andy Harig, VP of tax, trade, sustainability and policy development at FMI - The Food Industry Association, observed that the latest data underscores ongoing pricing challenges that have yet to fully resolve. “The latest CPI numbers demonstrate that taming inflation continues to be an uneven process. Food prices are driven by many factors and can be volatile, as demonstrated by September’s 0.4% increase in the food-at-home CPI,” he said, adding that food retailers and supply chain partners can be heartened by the overall slowing trend. “But we shouldn’t let a single month’s data obscure the very real progress that has been made addressing food price inflation – on a year-over-year basis, food-at-home inflation came in at 1.3%, a very strong showing.”
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Digging into the fresh BLS numbers, five of the six major grocery indexes experienced higher prices last month. The CPI for meats, poultry, fish and eggs rose 0.8% last month, once again fueled by higher egg prices, this time up 8.4%. The index for fruits and vegetables increased 0.9%, while cereals and bakery products ticked up by 0.3%, dairy and related items edged 0.1% higher and “other” food at home products climbed 0.2% in September. Inflation in the nonalcoholic beverage segment remained unchanged.
Last month, the grocery CPI outpaced the foodservice index, as food-away-from-home prices went up 0.4% for that time frame. Of interest to grocers that operate fuel stations, gas prices dropped 4.1% as summer vacation season drew to a close.
Harig provided a more upbeat assessment as grocers head into the busy selling months from Halloween through New Year’s. “We remain cautiously optimistic that the worst of food price inflation is behind us an consumers will continue to experience a more stable pricing environment. There are undoubtedly challenges ahead, not the least of which is assessing and addressing the impact of Hurricanes Helene and Milton. The food supply chain is resilient, and the lessons learned throughout the COVID-19 era have fostered additional safeguards in the system that can help protect against future shocks,” he noted.
