An op-ed in the New York Times today caught my eye: "The Real Reason Your Groceries Are Getting So Expensive." This got me curious: are groceries getting more expensive? I haven't checked for a while. Here's the answer:
Food inflation peaked in early 2022 but it's been plummeting since then. Groceries are still more expensive than they were a year ago, but on a month-over-month basis we're actually starting to see some deflation in food prices. For the past couple of months, groceries have been getting cheaper, not more expensive.
Now, the op-ed that caught my eye is more about long-term antitrust policy and the effect it's had on smallish food chains, not the latest inflation numbers. So there's a bit of apples and oranges here. Still, for the moment anyway, grocery prices are pretty clearly on a significant downturn.
"there's a bit of apples and oranges here" < I see what you did there
I’m curious about this:
“Groceries are still more expensive than they were a year ago, but on a month-over-month basis we're actually starting to see some deflation in food prices.”
Sometime over this long weekend, I caught a few minutes of a radio interview with a professor (of something or other) talking about inflation/deflation. And, sure, it was just an interview, not a polished academic journal entry, but the professor still left me confused.
He conceded that inflation was easing but insisted, if I understood him correctly, that grocery prices would not come down because episodes of deflation are so rare in our history.
He seemed to be indicating that we’re stuck with $6 eggs (per dozen) forever, though he did not use that example. Did I misunderstand him?
Prices of individual food items go down as well as up. So does gasoline for that matter. So no, you will not be stuck with $6 eggs - in fact they are already down in most places. People notice when prices go up, but not when they go down.
But overall food inflation has rarely been negative.
The $6 eggs were due more to an epidemic of bird flu among egg-producing chickens, not the "standard" pandemic-easing inflation.
At the height of the egg run this past winter, oddly, the cheapest place for eggs was Trader Joe's.
I hope the FTC blocks the merger of Kroger and Albertsons. This consolidation will kill competition across much of the west.
The current environment with limited competition is already blocking higher disinflation.
My go to for eggs is Whole Food 365 Large Brown Eggs - it's decent eggs at a great price $4.50 per a dozen. I think at worst it was 5.99 but it's crept back down last year. It's nearly always cheaper than what's at Giant, Safeway or Harris Tetter here in Northern Virginia.
Grocery stores run at something like a one to three percent profit margin. Were they to merge, Kroger and Albertsons would have something like a fifteen percent market share. Walmart is over twenty percent.
Here a dozen eggs are now down to $1.10, but for some reason saltine crackers are almost twice what they used to be.
Not everyone realizes (of course, all of us here DO realize) that even if inflation dropped to zero, the increased (inflated) prices would remain high. They'd just stop rising more.
It seems like the only thing where you keep getting consistently more for less is computing power.
I'm sure you're right that ON AVERAGE the cost of food is going back down -- and that may even mean that it's going down for a majority of us. But I think the point of the NY Times article is that in places where huge chains aren't making cheaper food available, prices are still very high and aren't likely to track the national averages. Don't know how you'd get at the difference in markets, but there is a difference.
Prices for ketchup and condiments in general are up.
Eggs are down (bird flu being dealt with)
Carrots are "reasonably" priced, celery--not so much
Drought will still be a problem--even after all the rain/snow out west in the past year.
War in Ukraine still affecting world market on some staples, sometimes in confusing ways, e.g. low prices in Europe because crop not getting transported out by sea....
If you select a time period where the end points are zero, with positive values between, a second order trend line will always be a concave downward arc.
First, I think the index would be a better graph than rate. It would show what people are actually seeing in the store.
Second, I think that companies raised a lot of prices because they could (see record profits) and now are going to slowly lower them to find the new equilibrium price.
In the PNW/Seattle/Tacoma area, prices are not going down. A 2 liter of Diet Coke is 3.29 at Safeway, Wal-Mart, everywhere. It used to be around a 1.00-1.29. When that drops back down, I'll believe it. Until then, going to the grocery store is a rage fest. The only place I'll shop now is WinCo, and they for now seem to be keeping things cheaper. Fuck Safeway.