weighingproduce.jpg Noel Hendrickson/DigitalVision/Thinkstock

Supermarket deflation hits 14th straight month

Grocery CPI flat versus previous month

The Consumer Price Index for food-at-home — a proxy for grocery-level inflation — declined 1.9% during the year ending January 2017, but after 13 consecutive years of decline was flat versus the previous month, according to the Bureau of Labor Statistics.

The 1.9% decline largely reflects a 4.9% decrease in the fruits and vegetable index.

The major grocery store food group indexes were mixed in January with dairy and related products up 0.8% (-0.5% year-over-year), marking its largest advance since May 2014. The index for meats, poultry, fish and eggs — which had declined for 16 consecutive months — rose 0.7%, as the index for eggs jumped 14.3%. That index declined 3.6% year-over-year. The index for other food at home rose in January, increasing 0.2%.

Restaurants, meanwhile, saw their largest price increase since September 2014, with a 0.4% increase in January. Prices were up 2.4% last month versus the previous year.

In a research note, Barclays analyst Karen Short said that lingering deflation is contributing to one of the most difficult operating environments in food retail that Barclays can recall. Barclays projects that given the rate at which input costs are declining, food retail price deflation will likely persist.

TAGS: Marketing
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.