Americans’ grocery bills are growing, causing some shoppers to cut back on discretionary spending as they find themselves struggling to afford the basics.
Food prices grew by half a percent from July to August, marking the fastest monthly rate of change since the fall of 2022. Behind the rising cost of food items on store shelves are three main culprits, according to experts.
Price hikes, he added, have been steepest on goods that the U.S. imports from nations facing higher levies. For example, the U.S. imports about 35% of its coffee from Brazil, whose exports are taxed at a rate of 50%.
The latest Consumer Price Index data shows that coffee prices rose 21% in August compared with a year ago.
As companies see their costs rise, they pass along those burdens to consumers. In the case of tariffs, some businesses began raising prices on products even before the levies were in full force.
“There’s no question that what we’ve seen is, we’re seeing companies increased prices because of the impending tariffs,” said Lempert.
“What they want to do is they want to protect themselves. A lot of these big food companies are public companies. So what they’ve gotta do is they’ve gotta report back to their shareholders on profit margins. So they’ve been hedging their bets,” Lempert said.
Sometimes, packaged-goods companies disguise price hikes by offering consumers less product for the same amount of money. The covert inflation strategy has been dubbed “shrinkflation,” Lempert explained.
“What they’re doing is they’re trying to put less in the package, hoping that you and I are not gonna observe that and keep that price either stable or just slightly increased,” he said
Climate change
Increasing temperatures and shifts in weather patterns have made conditions for growing some fruits and vegetables in the U.S. inhospitable. As a result, a lot of domestic production has been moved to Central and Latin America, according to Lempert.
“We can’t grow our food where we used to grow it,” he said.
Labor shortage
Additionally, Mr. Trump’s immigration policies, including raids on workplaces that employ large numbers of immigrants, plus waning interest in agricultural work, have led to an industrywide labor shortage, Lempert explained.
Consumers are reacting to higher prices by looking for deals, purchasing store brand goods instead of name-brands and buying shelf-stable groceries in bulk at shopping clubs like Costco.
Lempert said a little planning can go a long way to ensure that consumers can buy what they need.
“The number one thing that people want to do if they want to save money — stop wasting food,” Lempert said.
“Forty percent of all of our food in this country is wasted. A lot of that’s in our homes. So, take doggy bags from restaurants, use leftovers, freeze leftovers, don’t waste food and you’ll save a substantial amount of money,” he said.
