Dive Brief:
- Food-at-home prices rose in March at an 8.4% annual rate, down from the 10.2% rate recorded the month before, according to Consumer Price Index data released Tuesday by the U.S. Bureau of Labor Statistics.
- The food-at-home index fell 0.3% in March compared with February.
- Overall inflation continued to drop in March to a yearly pace of 5% — the smallest 12-month increase since the period ending in May 2021, the BLS noted.
Dive Insight:
Grocery prices and overall inflation continued to drop in March after hitting multi-decade highs last year.
In March 2022, food-at-home prices shot up at a 10% annual rate while overall inflation for that month reached 8.5%. Those figures climbed even higher as 2022 progressed.
In total, three of the six major grocery store food group indexes posted month-to-month decreases last month. The index for meats, poultry, fish and eggs decreased 1.4% in March compared to the month before, with the index for eggs, specifically, dropping 10.9%, per the BLS. Prices for fruits and vegetables declined 1.3%, while dairy and dairy-related product prices decreased 0.1%.
Meanwhile, prices for cereals and bakery products increased 0.6% compared to February, and nonalcoholic beverage prices rose 0.2%.
The index for shelter, which was the main contributor to overall inflation in March, offset a decline in the energy index, per the BLS.
Industry followers have said they expect food prices and inflation to taper but remain high this year.
“I really think and hope that we’re on track towards much more normal year-over-year food price inflation going into 2024,” Dr. Ricky Volpe, associate professor of agribusiness at Cal Poly, said last month following the release of the February CPI. “I don’t think we’ll hit it this year, but maybe next year.”
Volpe stressed that while certain commodity cost increases have been abating in recent months, it might take a while for those decrease to reach consumers.
Executives from several top grocers and retailers who sell food told their investors earlier this year that they are expecting the pace of price increases to decelerate considerably as this year continues.
