Grocery Prices Up 2.7% YoY, Nearly 32% Above Pre-Pandemic Levels

Grocery inflation is cooling off the pandemic-era highs, but the cumulative damage to consumer wallets is still front and center. Fresh data shows food-at-home prices climbed 2.7% over the past year and remain roughly 32% above where they sat before COVID hit.

The headline numbers

Grocery prices have risen 2.7% over the past year — that’s actually quite a bit less than overall inflation, which is running around 4.2%. So groceries are actually a relative bright spot inside the broader CPI basket right now.

The catch: the base is already elevated. Food prices are up 34.6% since 2019, meaning even modest annual increases stack on top of a much higher starting line for households.

Where the pain is concentrated

The averages hide the outliers. Fresh vegetables are up 11.9% over the past year, with tomato prices surging — tomatoes are up 32% over the past year because of a combination of record cold temperatures this winter, way too much rain, plus tariffs and rising diesel costs.

Protein is a mixed bag. Pork is up just 2.6% over the past year. And chicken is down 0.6%, still falling after a nasty bout of avian flu a year ago. On the other end, citrus is up 6.1% over the past year, mostly because Florida’s and Brazil’s orange crops have an ongoing, devastating citrus greening problem.

Eggs, the poster child for grocery inflation, have finally reversed. Egg prices have fallen a stunning 35.2% from last year’s avian flu crisis.

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Why prices are still sticky

Food prices remain high because of the combined impact of rising input costs, supply chain disruptions and corporate profits. Higher tariffs currently in effect on some imported food are an additional factor. Higher production, labor and fuel costs have rippled through every aspect of the food system.

Diesel is the quiet variable moving through the whole basket. Anything imported or trucked long distances — apples, citrus, tomatoes — is carrying that cost directly at the register.

Options market and stocks to watch

Grocers and consumer staples names are the most direct read on sticky food prices. Traders will want to watch how sales mix, private label penetration, and margins respond.

• WMT — Walmart’s grocery business is a share-taker in high-inflation environments as shoppers trade down. Watch for commentary on food price elasticity.
• KR — Kroger is the pure-play grocer read; identical sales and gross margin trends key here.
• COST — Costco’s traffic and renewal rates tend to hold up when household budgets tighten.
• ACI — Albertsons remains a barometer for conventional supermarket volumes.
• SYY — Sysco offers a foodservice angle if consumers trade dining out back for groceries.

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