Though inflation is making an apparent decline, prices at grocery stores across the U.S. continue to rise.
- Last month grocery prices increased 0.7% compared to the month before, according to the Consumer Price Index (CPI). In December, prices only increased by 0.2%.
- Though higher food prices are related to inflation, grocery prices are more susceptible to environmental factors like weather and natural disasters.
- Some of the highest grocery increases were in Denver, Colorado, and Washington, D.C.
- Chicago had the lowest increases.
Why it’s news
Already Americans are struggling with higher prices for nearly every necessity, meaning higher grocery prices present additional harm.
A growing number of Americans are living paycheck to paycheck, meaning any increases in necessities can bring further hardship to households. Nestlé CEO Mark Schneider recently warned that food prices would continue rising this year.
“We are still in a situation where we’re repairing our gross margin and, like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done,” Schneider says.
Some food items, like eggs, may soon see a price drop after reaching record highs. Overall, however, prices will likely rise this year.
Backing up a bit
Nestlé, the owner of more than 2,000 food brands, says that its prices on essential items will increase this year. Though the company increased its prices 8.2% last year, it says that these increases were not enough to offset rising production costs, which are eating into profit margins.
The planned price increases will be “very targeted” and only affect the areas Nestlé says are necessary. Schneider did not share which of the company’s 2,000 brands would be affected. Nestlé’s catalog of brands covers everything from chocolate to dog food to baby formula.
Other companies such as Coca-Cola, Pampers diapers producer Procter & Gamble, Colgate-Palmolive, and brewer Heineken have all announced price increases as the companies deal with higher production costs, energy, and labor.
Raw materials like dairy are still expensive, though prices have declined from peaks last year. Consumers can expect prices on nearly all food items to increase this year, CNN reports.