Another Uptick in Food Inflation
In a mixed bag of news for grocers, the latest government data shows that inflation is cooling but food prices continue on an upward trajectory. According to the U.S. Bureau of Labor Statistics (BLS), the Consumer Price Index (CPI) for all items edged up 0.1% in November, one of the lowest hikes of the year and less than the 0.4% uptick in October.
Although many financial analysts noted that the CPI rate dropped faster than expected and may portend a less inflationary environment in 2023, the prices in the food sector remain elevated. Labor Department researchers crunched the numbers and found that the general food index rose 0.5% in November, only slightly off the 0.6% increase in October.
[Read more: "Which CPG Categories Are Currently Experiencing the Most Inflation?"]
The CPI for food at home also edged higher by 0.5% last month, with four of the six major grocery food group indexes posting price gains. The CPI came in higher for fruits and vegetables (+1.4%), cereals and bakery products (+1.1%), dairy and related products (+1.1%) and nonalcoholic beverages (+1.7%).
During Thanksgiving month and the beginning of the holiday season, the index for meat, poultry, fish and eggs declined 0.2% following a 0.6% uptick in October. The biggest protein category drops came in beef, down 0.8% in November, and pork, down 0.3%.
On a year-over-year (YoY) basis, the BLS data affirmed this was a year marked by inflation. The index for food-at-home rose 12% last month compared to November 2021.
Meanwhile, data and tech company Numerator is out with its own inflation report for November, noting that seasonally adjusted prices for all food-at-home purchases rose 0.1% between October and November compared to the previous 0.4% increase from September to October. Numerator’s YoY findings aligned with BLS statistics, revealing that food-at-home prices climbed 11.6% in the past 12 months. In its report, Numerator pointed out that consumers are dealing with higher food prices by shifting to lower-cost private label brands, shopping at lower-cost stores and reducing the amount of food they buy.
Other indicators also show that it may be too early to breathe a sigh of relief about high food prices. Last week, the Labor Department reported that the Producer Price Index (PPI) edged 0.3% higher in November, with wholesale prices going up more than anticipated. The 3.3% increase in prices for final demand foods was a “major factor” in the overall increase, the agency noted.
