Inflation Is Down, but Grocery Prices Are Up. Here's What's More Expensive Now

Amidst the economic difficulties brought about by the pandemic, inflation and food prices continue to be a major concern for most people. Inflation hit 9.1% a year ago, the highest in 40 years. In response, the Federal Reserve has aggressively raised interest rates by 5% since last March, making the rate hikes the fastest cycle in history.

Although annual inflation rates have fallen to 4%, food prices have remained stubbornly high. In May, grocery prices were 5.8% higher than a year ago and the cost of eating out was up by 8.3%. Overall, the price of food has increased by 6.7%, surpassing the general inflation rate of 4.0%. The change in grocery prices vary widely by product.

Grocery items that have become the most expensive

According to the Bureau of Labor Statistics, cereal and bakery products have gone up by 10.7%, nonalcoholic beverages and beverage materials by 8.7%, and dairy and related products by 4.6%, between May 2022 and May 2023.

Some of the specific items that have seen the highest price increases include margarine (up 22.5%), flour (up 17.1%), and bread (up 12.5%). Here are the other items that have increased dramatically from a year ago:

• Frozen vegetables: +18.7%
• Salad dressing: +14.3%
• Candy and chewing gum: +11.6%
• Sugar: +11.1%
• Cookies: +10.9%
• Juice and other nonalcoholic drinks: +9.9%
• Spices, seasonings, condiments, sauces: +9.5%
• Lettuce: +9.4%
• Soups: +8.7%
• Ham: +8.2%
• Ice cream: +8%
• Snacks: +7.9%
• Lunch meats: +6.2%
• Coffee: +4.8%

Not all grocery prices are up

Despite an overall increase in grocery prices the past year, some individual items experienced a decrease in cost. Most notably, last month eggs experienced a significant price drop of 13.8%, the biggest decline in a single month since January 1951.

Here are the other items that have decreased in price or have not risen as much as inflation.

• Bacon: -9.8%
• Other pork products: -7.3%
• Oranges, including tangerines: -4.7%
• Tomatoes: -3.5%
• Fish and seafood: -1.1%
• Milk: -0.8%
• Fresh fruit: -0.5%
• Chicken: +0.9%

Prices expected to remain high

Since the pandemic, food prices have been on the rise, and this trend seems unlikely to end anytime soon. Major triggers of the spike in food prices include extreme weather conditions, the ongoing war in Ukraine, avian flu, and higher costs that have trickled down along the supply chain.

Ingredient prices have started to go down, but food suppliers have continued to keep their prices high. Despite people buying fewer items, the cost of groceries are expected to stay high.

Cut your grocery bill with these tips

So, what can you do to navigate these rising prices and keep your grocery budget under control? One strategy is to plan your meals carefully and make a shopping list before you go to the store.

By sticking to a list and avoiding impulse buys, you can ensure that you don't overspend on groceries. Another tip is to look for sales and coupons on the items you need. Check the price per unit to determine which size of a product will give you the most for your money. Many stores offer weekly specials and digital coupons that can help you save money.

And don't forget to shop around -- different stores may have different prices on the items you need, so it's worth checking out a few different options. Opt for generic or store-brand products rather than name-brand items, as they are often just as good, but cheaper. If you use a credit card, get one with grocery rewards.

Also consider shopping at discount supermarkets, which tend to have lower prices than larger chains. With a little effort and strategy, you can cut your grocery expenses down and stretch your grocery budget further.

Inflation may be down, but grocery prices are up in certain categories. By keeping an eye on any sales, comparing prices, and finding affordable alternatives, we can still enjoy the food we want without breaking the bank. Stick to a grocery list and plan your meals accordingly. This will help you avoid impulse buys and going over budget. With these approaches, you can keep your daily expenses in check and stay on track towards your financial goals.