Happy Couple Having Fun in the Supermarket

In March, grocery prices fell for the first time since September 2020, the Bureau of Labor Statistics reported.

Three of six major food indexes fell in March from February. The index tracking meat, poultry, and eggs fell 1.4 percent, cut by a sizable drop in egg prices.

Prices for fruits and vegetables shrank 1.3 percent; dairy products edged down 0.1 percent.

Prices for bakery goods, cereals, and non-alcoholic drinks rose.

Although key prices fell month to month, the overall price of food shot up 8.4 percent on an annual basis in March, while inflation overall gained just 5 percent. 

Over the past 12 months, eggs have rocketed up 36 percent, potatoes 9.7 percent, flour 17.5 percent, milk 5.5 percent, and cheese 8.2 percent. 

In contrast, bacon’s price went down 5.5 percent and ground beef slipped 1.4 percent. The cost of fresh fruits ticked down 1.5 percent. 

Consumers have been forsaking well-advertised brands for cheaper versions, store brands, or generic items, a trend we reported in “Recession Trend: Shoppers Paring Back Spending to Basics” (7 Mar 2023).

As a result, the priciest products made up 9 percent of the grocery market in March, compared to 24.5 percent in January 2019, according to research service Adobe Analytics.

At the same time, the cheapest items added an additional 13 percentage points to their market share and now claim almost half of grocery purchases, Adobe said. 

TREND FORECAST: Any drop in food prices is welcome, but they will never return to their pre-COVID War levels.

Damage done to Ukraine’s croplands by the war there will take years to repair. Western sanctions on Russian exports are likely to outlast hostilities. Even more powerful, the “new normal” of droughts, floods, and other weather extremes will make harvests unpredictable and dependable from now on.

These factors, as well as three-plus years of inflation, have lofted food prices to a new level, where they will remain.

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