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July price inflation eases, but not for grocery

Food-at-home CPI up 13.1% year over year, 1.1% since June

Russell Redman

August 10, 2022

5 Min Read
Food Lion checkout-customer-Garner NC store.jpg
Though the overall July Consumer Price Index didn't rise from the previous month, the food-at-home index showed a higher month-to-month increase and posted the biggest 12-month gain since the period through March 1979.Food Lion

The July Consumer Price Index (CPI) came in flat from the previous month, but inflation — up again for food — remains high historically, according to the U.S. Bureau of Labor Statistics (BLS).

The CPI for All Urban Consumers didn’t rise on a seasonally adjusted basis month to month, following gains of 1.3% in June,  of 1% in May, 0.3% in April, 1.2% in March, 0.8% in February and 0.6% in January, BLS reported Wednesday. Year over year, inflation was up 8.5% (unadjusted), down from 12-month increases of 9.1% for June, 8.6% for May, 8.3% for April, 8.5% for March, 7.9% for February and 7.5% for January.

BLS said the food CPI, including food-at-home and food-away-from-home, edged up 1.1% month over month in July and marked the seventh consecutive monthly gain of 0.9% or more, including 1% in June, 1.2% in May, 0.9% in April, 1% in March, 1% in February, and 0.9% in January. On a 12-month basis, the food CPI rose 10.9%, topping the 10.4% increase in June and well above year-over-year upticks of 10.1% in May, 9.4% in April, 8.8% in March, 7.9% in February and 7% in January.

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July’s food-at-home index surged by 13.1% year over year, vaulting the 12.2% increase in June and representing the biggest 12-month gain since the period through March 1979, according to BLS. That food-at-home CPI has climbed steadily on an annual basis since the start of the year, rising 11.9% for May, 10.8% for April, 10% for March, 8.6% for February and 7.4% for January.

Related:U.S. online grocery sales jump 17% in July

The month-to-month rise in the food-at-home index remained steep in 2022, up 1.1% in July after gains of 1% in June, 1.4% in May, 0.9% in April, 1.5% in March, 1.4% in February and 1% in January. The latter increase came after only a 0.4% uptick in December.

All six major grocery store food group indices rose in July, BLS reported. The index for nonalcoholic beverages saw the largest monthly increase at 2.3% (including 3.5% for coffee); followed by other food at home ( 1.8%); cereals and bakery products ( 1.8%); dairy and related products ( 1.7%); meats, poultry, fish and eggs ( 0.5%); and fruit and vegetables ( 0.5%). The trend was similar on a year-over-year basis. The sharpest 12-month increases came from other food at home ( 15.8%) and cereals and bakery products ( 15%), while the remaining major grocery store food groups had gains ranging from 9.3% (fruit and vegetables) to 14.9% (dairy and related products).

Meanwhile, the July index for food-away-from-home rose by 0.7% month to month and by 7.6% year over year, dipping from respective monthly and 12-month increases of 0.9% and 7.7% in June.

Related:Inflation pushes up U.S. grocery sales again in July

IRI July 2022 grocery price inflation.jpg

Excluding food and energy, the July CPI rose 5.9% from a year ago and 0.3% from a month ago, a slight ease-up from upticks of 5.9% year over year and 0.7% month to month in June, according to BLS.

Energy costs, the chief factor in this year’s CPI escalation, relaxed a bit in July, up 32.9% year over year but down 4.6% month over month, compared with respective increases of 41.6% and 7.5% in June. Gas and fuel oil prices were up 44% and 75.6% for the 12 months through July versus hikes of 59.9% and 98.5%, respectively, in June. Month over month, prices fell 7.7% for gas and 11% for fuel oil in July.

“Consumers are responding to rising prices by shopping promotions, prioritizing value options, and trading down to avoid going without,” according to Krishnakumar (KK) Davey, president of thought leadership for CPG and retail at consumer goods market researcher IRI.

Indeed, IRI’s latest findings show that consumers are shifting away from national brands in categories where store brands are already well-known or in commodity categories. For example, in the four weeks ended July 24, private-label share grew the most in fresh eggs ( 6 percentage points), sugar ( 5 pp), sour cream ( 4 pp), shortening and oil ( 3 pp), butter/butter blends ( 3 pp), flour ( 2 pp), frozen meat ( 2 pp) and bottled water ( 4 pp).

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Consumers, too, are buying greater-value meal solutions, such as pasta ( 6 percentage points), rice ( 5 pp), frozen potatoes ( 6 pp) and canned soup ( 3 pp), according to year-over-year IRI data for the 13 weeks ended July 10. Meanwhile, shoppers are purchasing less of higher-priced categories, such as sports drinks (-9 pp), ready-to-drink coffee/tea (-3 pp), frozen novelties (-6 pp), refrigerated entrées (-8 pp) and frozen dinners/entrées (-5 pp).

“We are advising our manufacturer clients to deploy all levers of strategic revenue management, prioritize strong in-market execution and invest in retailer partnerships to ensure that the right products are available in the right places at the right times,” Krishnakumar added. “Additionally, retailers must have the tools to quickly adjust to changes in consumer preferences to ensure they are offering the right assortment at price points that appeal to price-sensitive shoppers as well as their most valuable customers.”

In the e-commerce arena, Adobe Analytics reported a dip in online retail prices. For July, the Adobe Digital Price Index showed online prices down 1% year over year after upticks of 0.3% in June and 2% in May — marking the first month of deflation for e-commerce after 25 consecutive months of inflation. Online pricing fell 2% month over month in July, with 14 of the 18 product categories tracked by the Adobe DPI seeing price decreases. Grocery, however, posted online price hikes of 1.44% month to month and 13.4% year over year in July.

“Wavering consumer confidence and a pullback in spending, coupled with oversupply for some retailers, is driving prices down in major online categories like electronics and apparel,” explained Patrick Brown, vice president of growth marketing and insights at Adobe. “It provides a bit of relief for consumers, as the cost of food continues to rise both online and in stores.”

Online remained the grocery retail channel most impacted by inflation in July, according to consumer market data specialist Numerator. Online grocery prices were up 25.7% year over year for the four weeks through July 31, with dollar stores second at an inflation rate of 22.4% over that period. Online and dollar were followed by mass merchants (15.4%), supermarkets (13.6%) and warehouse clubs (9.3%) in grocery inflation rates for July.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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