Food prices are no longer rising as much — but here's why it might not feel that way
What caused food prices to level off recently?
Food prices leveled off recently due to a combination of factors, including reduced demand as consumers became more sensitive to rising prices, increased competition as shoppers switched to cheaper store brands, and companies offering discounts to maintain market share. Additionally, the latest consumer inflation report showed grocery prices rose just over 1% in the last 12 months, a significant improvement from previous years.
How much did grocery prices increase in the last year?
Grocery prices increased by just a little over 1% in the last 12 months, according to the latest consumer inflation report5. This is a significant improvement compared to the previous year, when prices jumped nearly 5%, and the year before that, when they soared by double digits.
What is "shrinkflation" and how does it affect consumers?
"Shrinkflation" refers to the practice of companies reducing the size or quantity of a product while maintaining the same price. This results in consumers effectively paying more for less. The impact on consumers includes frustration, paying higher costs for the same quantity of goods, and potentially changing purchasing behaviors, such as switching to alternative brands or products that offer more value for the same price.