Prices Varied Considerably Across 10 Key Grocery Categories in Q1

Prices in key grocery food categories remained stubbornly high in the first quarter of 2024, while in a few others, they plunged to new lows versus the same period last year. Using its real-time Shopper Intelligence Platform, Catalina looked at the aggregate price increase of 10 common U.S. grocery categories: hand and bath soaps, deodorants, cereal, soft drinks and water, yogurt, paper products, soaps and detergents, coffee, frozen vegetables, and frozen prepared foods.

“Our latest data shows grocery inflation has dropped considerably from a year ago in these 10 categories,” said Wesley Bean, U.S. chief revenue officer at St. Petersburg, Fla.-based Catalina. “While this is positive news overall, it’s important to remember the impact isn't felt evenly. Value-conscious shoppers are still grappling with significant price increases on essential items, even as the broader inflation rate cools.”

The 3% average Q1 inflation rate from Catalina’s data aligned with the overall 3.5% inflation rate reported in March’s U.S. Consumer Price Index (CPI). When compared with Q1 2023, the rate of inflation dropped in every category, falling anywhere from 18% for yogurt to 6% for deodorants in Q1 2024.

“When we drill down to individual products within these 10 categories, we gain insights as to why shoppers say they continue to feel the impact of higher prices, even though the rate of inflation has fallen considerably from six months ago,” explained Bean. “Families with children and on-the-go consumers are some of the lifestyle categories continuing to feel the pinch.”

While the effect of inflation on the overall cereal category in Q1 is significantly lower than Q3 2023 (up 5% versus up 13%), the price of cereal bars increased 13%. While overall coffee prices decreased slightly, convenience carries a premium: Catalina’s Shopping Basket Index revealed only a 1% increase in Q1, with prices for regular coffee (down 1%), coffee pods (down 2%) and instant coffee (down 3%) falling below the year-ago period. Convenient ready-to-drink single-serve coffee drinks saw a 3% price increase, however.

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An unexpected finding was that value-brand prices are rising faster than their premium counterparts in some categories. Catalina’s Shopper Intelligence Platform found that the following key value brand categories continued to cost more than a year ago: bath tissue (up 6%), pizza (up 5%) and detergent (up 2%). Meanwhile, premium brand prices in the same categories dropped slightly or remained flat: bath tissue (down 2%), detergent (down 1%) and pizza (flat).

For households with kids, many popular items remain well above the average 3% inflation rate for Q1 2024. Among these products were baby laundry detergent (up 21%), kids’ frozen dinners (up 7) and baby wipes (up 6%). However, shoppers looking for cheaper items among private brands should compare categories carefully, Catalina cautions. The cost of name-brand baby laundry detergent rose 21% in Q1 2024 and private-brand products dipped 2%, but during the same period, private-brand baby wipe prices rose 11% and brand- name products increased 6%.

“Because inflation rates continue to vary by grocery category, retailers and brands have an opportunity to refine their shopper marketing strategies to attract brand switchers and remind loyal shoppers of the value of their brand,” noted Bean.