Grocery prices fall for first time since 2020

The food-at-home index fell by 0.3% in March, the first time the category has seen a decline since September 2020.
A woman shops for produce.
  • The Consumer Price Index rose 0.1% in March and 5% during the last 13 months.
  • The at-home food index (groceries) fell by 0.3% in March, the first time the category declined since 2020.
  • The slowed inflation is “promising” for consumers, but instant relief hasn’t arrived, says Retail Leader Pro Chief Retail Analyst Elizabeth Lafontaine.  

Annual inflation in the U.S. slowed for the ninth month in a row in March, and grocery prices fell month-over-month for the first time since September 2020 .

The Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS) rose 0.1% in March, down from a 0.4% increase in February. Overall, CPI increased 5% during the last 12 months, according to the BLS data. Inflation peaked last summer and has slowed in the months since, while continuing to impact consumer behavior

“It’s incredibly promising to see that inflation is slowly receding, but I don't necessarily think that means consumers are going to walk into stores tomorrow and see prices are lower or more in line with expectations,” said Elizabeth Lafontaine, chief analyst for Retail Leader Pro. “It’s important to look at the impact of inflation on all areas of consumer spending — like rent and new car prices that are both still rising — which certainly impacts disposable income.”

Overall, the food index was unchanged in March versus February. The food-at-home index dipped by 0.3% in March, the first time the category has seen a decline since September 2020, according to the BLS. Three of six major grocery store food indexes also decreased in March — meats, poultry and fish saw a 1.4% decrease in March, while the CPI for eggs fell 10.9%; the fruits and vegetables index fell by 1.3% and the index for dairy products dipped by 0.1%.

Other categories, however, were basically flat. The index for other food at home rose  0.4% in March, which is higher than the 0.3% increase in February. Cereal and bakery products increased by 0.6% and the index for nonalcoholic beverages rose by 0.2% in March, the BLS said.

The food at home index grew 8.4% for the year ending March. Prices for cereals and bakery products rose 13.6% for the year ending in March. The remaining major grocery store food groups posted increases ranging from 2.5% for fruits and vegetables to 11.3% for nonalcoholic beverages.

Overall, food away from home rose by 0.6% from February and 8.8% compared to the previous 12 months.