Grocery Prices Fall in April
In news that’s worthy of an exclamation point, the latest government data shows a decrease in food-at-home prices and bump in grocery sales during April.
According to the latest Consumer Price Index (CPI) data from the U.S. Bureau of Labor Statistics (BLS), grocery inflation dipped 0.2% last month, even as the overall CPI rose a 0.3% during the period. Within the food-at-home arena, three of the six major indexes posted decreases: meats, poultry, fish and eggs (-0.7%), fruits and vegetables (-0.8%) and nonalcoholic beverages (-0.2%).
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Some categories did experience slight inflation. The CPI for cereals and bakery products went up 0.6% in April following a 0.9% decline in March. The index for dairy and related products edged a scant 0.1% higher last month, as did the “other” food at home index.
In comparison, restaurant prices continued on an upwards trajectory. BLS reported that the food-away-from-home CPI increased 0.3% in April, the same rate as the prior month.
Meanwhile, the U.S. Census Bureau reported the latest advance monthly sales data on the same day. Adjusted retail sales at grocery stores rose from nearly $73.8 billion in March to $74.2 billion in April, a 0.6% uptick. For the first four months of 2024, overall grocery sales came in 1.5% higher compared to 2023.
Heading into the mid-point of 2025, the figures portend stabilization, according to industry leaders. “The latest CPI report demonstrates that the process of taming inflation continues, with food-at-home a particular bright spot in this month’s data. This is good news for both consumers and the food industry,” said Andy Harig, VP of tax, trade, sustainability and policy development at FMI - The Food Industry Association.
He continued, “Similarly, we’re encouraged by our latest consumer trends report that found that food price inflation has done little to impact how consumers feel about their grocery shopping experience. According to FMI's U.S. Grocery Shopper Sentiment Index, which measures consumers’ attitudes about grocery shopping in general and their primary store specifically, sentiment reached a post-COVID-19 pandemic high in 2023 (72 out of 100) and continues to remain elevated (currently 70 out of 100), with more than half of shoppers surveyed expressing positive feelings toward grocery shopping.”
Matt Pavich, senior director of strategy and innovation at Revionics, an Aptos company specializing in retail price optimization solutions, agreed that the news is welcome. “Today's releases of retail sales and monthly inflation data provide a view of a very stable and promising retail market,” he remarked. “Not only did food inflation not occur, but categories impacted by avian flu – eggs and poultry – saw significant pricing decreases since the last report. Multiple categories such as apples, citrus fruit, peanut butter, and coffee are less expensive today than a full year ago. This stability is good for retailers and consumers alike; it allows both to operate with fewer costs and clearer budgets.”
That said, grocers can expect consumers to remain conscious of price. “While inflation continues to be muted in most sectors, consumers are still actively downtrading – looking for more promotions, low-price alternatives to name brand items, smaller basket sizes and more affordable retailers to shop with. Retailers should remain focused on offering the best promotions and everyday prices to grow share profitably as consumers remain committed to value heading into the summer months,” Pavich said.
Added Harig: "Food is a volatile sector – which is why it is excluded from core CPI calculations – and bears continued monitoring. For example, energy prices have a significant impact on food costs and are running hotter than expected. But today’s CPI report is incredibly positive news for grocery shoppers and shows that the industry’s efforts to engage and partner with consumers to help address high inflation have continued to drive progress.”
