Grocery inflation is not going anywhere
As tariff-related jitters have affected Wall Street, businesses and consumers over the last few weeks, the latest inflation data from the U.S. Bureau of Labor Statistics also points to continued marketplace volatility. On one hand, the overall Consumer Price Index (CPI) dropped 0.1% in a piece of welcome news, but grocery inflation ticked up 0.4%. On a yearly basis, food-at-home prices came in 2.4% higher last month compared to March 2024.
The small but impactful hike comes after a 0.2% bump in February and, not surprisingly, was fueled by a 5.9% price increase in eggs. That brought the CPI for meats, poultry, fish and eggs up to 1.3%, while the index for dairy went up 1% and the nonalcoholic beverages index rose 0.6% for the month. Food categorized as “other” climbed 0.5% in that time frame.
Those egg numbers may look better in a few weeks, however, as March increases are likely to be tempered by a stabilization of the avian influenza situation and better supply numbers that are relieving price pressures. “The CPI numbers released today on food at home demonstrate that grocery prices continue to face headwinds in this uncertain economic environment. While the index for eggs increased, pressures in that category are starting to ease as the avian flu situation has begun to abate and wholesale egg prices have fallen,” noted Andy Harig, VP of tax, trade, sustainability and policy development at FMI - The Food Industry Association.
[Related: Consumers adjusting purchasing decisions amid tariffs, elevated prices]
Some categories experienced a dip in prices in March, according to BLS data. The CPI for fruits and vegetables fell 0.5% and the index for cereals and bakery products edged down by 0.1% last month.
While ongoing inflation may be on grocers’ minds, the competition for consumers’ food dollars remains tight. The CPI for food away from home also increased in March, up 0.4%.
With March in the rearview mirror, retailers and industry partners are now focused on readying their offerings for summer and keeping an eye on the often-changing tariff news. “While tariffs announced in March have thus far had limited impact on food prices, the overall situation continues to remain uncertain and bears watching – especially as reciprocal tariffs were put in placed earlier this month and then dialed down for most counties yesterday. This is good news for consumers,” Harig remarked.
Added Steve Markenson, FMI’s VP of research and insights: “The economic environment and the lack of clarity around tariffs is increasingly weighing on consumers. FMI’s April Grocery Shopper Snapshot found that only 36% of shoppers have positive expectations for the year ahead, down from 56% in January. For 57% of consumers, the impact of tariffs on the availability, price or safety of food remains their top concern for 2025. Despite these shifts in consumer sentiment, the good news is that 79% say they feel in control of their household grocery spending. This suggests that shoppers remain resilient and nimble in navigating these challenges to feed themselves and their families.”
This story originally appeared on sister publication Progressive Grocer.
