Prices for grocery items escalate once more in June
Grocery Inflation Reaches 2.4% in June 2021
Grocery prices continued to rise in June, with shoppers paying more for nonalcoholic beverages (+1.4%) and other food at home (+0.2%) among other items. According to the latest Consumer Price Index data, inflation rose 0.3% from May and is now up 2.7% year over year.
The ongoing elevation of prices is due to a combination of specific supply shortages, tariff-driven cost increases, and broader economic inflation factors. Meat, poultry, fish, and eggs saw significant price increases, with eggs rising by 27.3% over the prior 12 months. Supply chain issues affected protein and dairy products, pushing up prices for butter and chicken. Tariffs on imports also contributed to higher costs on key grocery staples.
Inflationary pressures more broadly increased consumer prices by 2.7% year-over-year in June, reflecting increased costs in labor, energy, and materials. Climatic events also increased volatility and scarcity of fresh produce, contributing to upward price pressure.
Three of the six major grocery indexes rose in June, while three decreased. The categories with the greatest year-over-year (YoY) rate include meats, poultry, fish, and eggs (+5.6%) and nonalcoholic beverages (+4.4%). The index for meats, poultry, fish, and eggs declined slightly by 0.1% in June, with a 2% increase in beef prices offset by a 7.4% drop in egg prices.
The dairy and related products index went down by 0.3% in June. Coffee prices increased by +2.2% and citrus fruit prices increased by +2.3% last month. Shoppers paid more for fruits and vegetables (+0.9%) last month, while the Cereals and Bakery Products index decreased by 0.2% in June, following a 1.1% increase in May.
Consumers remain very price sensitive due to tariffs causing retail uncertainty. The latest NRF and Brick Meets Click data shows slightly slower in-store sales and higher online orders. Reports indicate that the National Retail Federation has sued New York over an algorithmic pricing law that would require businesses to disclose to consumers when a price was set by an algorithm using their personal data.
In June, away-from-home prices increased by more than food-at-home prices. Food-at-home prices ticked up 0.3% in June. Experts are weighing in on shifting shopper behaviors and major macro influences shaping the grocery landscape in midyear reviews. The ongoing inflationary pressures, coupled with supply chain disruptions and tariffs, are expected to continue impacting grocery prices in the coming months.
- The National Retail Federation has recently sued New York over an algorithmic pricing law that requires businesses to disclose to consumers when a price is set by an algorithm using their personal data, highlighting the increasing importance of personal-finance considerations in today's business environment, especially in the grocery sector.
- As inflation in personal-finance essentials like grocery items continues to rise, consumers are becoming more price-sensitive, with experts predicting that ongoing inflationary pressures, supply chain disruptions, and tariffs will significantly impact personal-finance budgets in the coming months.
