Grocery Prices Still Soaring Amid Easing Inflation
The phenomenon of 'rockets and feathers' is being observed in the US grocery market, where prices for food eaten at home have risen sharply in recent years. The term describes how prices tend to rise quickly but then decline slowly.
According to Matt Hamory, who leads the global grocery practice at consulting company AlixPartners, 'the public is coming to grips with... things aren't getting any cheaper.' He notes that it takes deflation for prices to go down, which is rare. This year, food price inflation is expected to rise 2.7% across the country, higher than in 2024 and 2025 but close to the historical average of 2.6%.
The study by Bain & Co. and NielsenIQ found that the number of items purchased at US grocery stores declined sharply starting in February this year, due to high gas prices, rising GLP-1 usage, and cuts in government food aid. Consumers are also looking for deals and shopping around to find them.
Big retailers like Walmart and Target have started investing in price cuts, with Walmart rolling back prices on ground beef, corn, red cherries, ice cream, potato chips, and Coca-Cola and Pepsi products. Hamory notes that if big retailers are leading the way, it could force others to act.