Even though the inflation rate dropped to 3.5% in June after reaching 4.2% in May, consumers are still finding no relief at grocery stores.
Food prices in the U.S. have risen 33% over the past seven years, the largest seven-year increase in about 50 years, the New York Post reported Friday.
While inflation has plummeted from the 40-year high reached during the pandemic, prices have continued climbing, with ground beef providing the best example. A pound of ground beef cost $6.82 in June, a 79% increase from 2019, the Post reported, citing Bureau of Labor Statistics data.
Scott D. Martin, a partner at the Kingsview Wealth Management firm, told the Post that because prices have remained stubbornly high for years, it has become a new normal for shoppers.
“While inflation has cooled from its peak, grocery prices have not returned to where consumers remember them,” Martin said. “Food prices have effectively reset to a permanently higher level after years of supply chain disruptions, labor shortages, transportation costs, and broad inflationary pressures.”
Bureau of Labor Statistics records over the past 14 years showed that between 2012 and 2019, the U.S. saw a total increase in food prices of just 6.4%, with costs accelerating after the pandemic began in early 2020, the Post reported.
Between January 2021 and January 2023, food prices surged by about 21%, and they have continued increasing by nearly another 10% since then.
Douglas Holtz-Eakin, president of the American Action Forum, told the Post the spike has remained persistent because of shrinking U.S. cattle herds and the start of the Ukraine war in 2022.
“Grocery prices have gone up especially in 2021, but they have stayed high due to cattle disease and bad growing conditions,” he said. “The war in Ukraine hurt as well because it’s essentially the grain basket of the world.”
The clearest indication that grocery prices have risen dramatically is that Americans have fundamentally changed the way they shop.
“Households are increasingly purchasing private-label brands, comparing prices across multiple retailers, buying in bulk when discounts are available, and cutting back on discretionary food purchases,” Martin said. “Even higher-income consumers have become far more price-conscious because groceries are one of the most visible household expenses.”
Martin added any relief is unlikely to come soon, as the U.S. contends with renewed pressure from tariffs and increasing transportation and energy costs.
Prices for all food are expected to increase 3.1% in 2026 and another 3.1% in 2027, the Post reported, citing the latest Food Price Outlook from the Agriculture Department’s Economic Research Service.