Americans browsing the supermarket aisle will notice that most foods are much more expensive than they were a year ago. Egg prices soared 39.8%, while flour became 23.3% more expensive. Milk rose 17% and the price of bread jumped 16.2%. Meat and poultry also rose in price. Chicken prices increased by 16.6%, while meats increased by 6.7% and pork by 6.8%. Fruit and vegetables together increased by 9.4%. Overall, food prices rose 13.5% and restaurant menu prices rose 8%.
Because there is no relief at the grocery store
The US Federal Reserve is raising interest rates in a bid to tame inflation, but the central bank says food prices are largely out of control. This is because food prices are affected by global events, such as the war in Ukraine, which affects the cost of wheat and other commodities. The prices also reflect the impact of natural disasters such as crop-killing droughts and diseases such as bird flu, which has limited the supply of eggs and turkeys. In addition, it takes time for changes such as reductions in ingredient prices to trickle down to consumers. This means that relief from rising food prices could delay declines in other sectors. And the demand for food is not flexible – consumers may be able to skimp on other items, such as clothes or petrol, but they must eat. Even so, shoppers are increasingly making changes to their diet and shopping habits to cope with rising costs. People are withdrawn from certain objects. Sales of frozen dinners and entrees fell about 11 percent by volume in August compared with a year earlier, according to a report this week from IRI, a market research firm. Cookie volumes and refrigerated juice volumes declined by nearly 9% and about 8%, respectively, over that period. Lower-income households in particular skip items such as juice, snacks and candy. Recently, Applebee’s and IHOP have reported an increase in higher-income customers, who may trade up from more expensive restaurants. And Tyson ( TSN ) has seen more demand for chicken as shoppers buy fewer expensive steaks.
What’s more expensive?
Seasonally adjusted prices of most grocery items rose from July to August, but there were some differences. Margarine increased by 7.3%. Eggs were 2.9% more expensive and sugar by 2.4%, while flour and bread rose by 2.2%. Canned fruit prices rose 3.4% while fresh vegetables became 1.2% more expensive. Hot dog prices rose 4.9%, while ham rose 1.3% and turkey rose 2.2%. However, some meat prices fell. Bacon was 0.5% cheaper, while the price of roast pork, steaks and ribs fell 1.9%. And prices of some fruits also moderated, with apples becoming cheaper by 2.3% and citrus fruits falling by 1.6%.
