In an August 30th release, the Food Industry Association issued the U.S. Grocer Shopper Trends: Return to Routine. This report confirmed that 39 percent of shopper are concerned over food prices although down from 42 percent a month ago. Approximately two-thirds of respondents are concerned that prices are still rising for the foods that represent their preferences. The July Personal Consumption Expenditure Report confirmed a 1.4 percent increase in the price of a basket of foods compared to July 2022, below the long-term inflation rate of two percent.
Andy Harig Vice President of Tax, Trade, Sustainability and Policy Development for the FMI noted, “Although there have been significant changes in the marketplace over the past few years, actual affordability, when you look at the number its still there.” He added, “Particularly over the past two years where we’ve seen the period of higher inflation, you continue to see the consumer really spending robustly and really finding a way to not just get what they need but in many cases get what they want at the grocery store.”
Despite political rhetoric claiming unrestrained food inflation, Dr. Ricky Volpe, Associate Professor of Agribusiness at California Polytechnic State University stated, “Year-over-year food price inflation is projected to reach below the historical average of two percent through the end of 2024 largely because of moderated energy and commodity prices.” He added, “It is forecast to decrease even more going into 2025, but it does not mean that we should expect food price on average to decline.”
Depending on political persuasion, consumers are provided with biased pre-election perspectives One side incorrectly claims that excessively high prices, actually reflecting 2023, are due to past policy decisions by the current Administration. The other side maintains, without corroboration, that high prices are due to gouging by supermarkets. As with most political exhortations, there is considerable exaggeration, disinformation and temporal distortion. The truth lays somewhere between the extremes.