Grocery Prices Are Low—But You May Not Have Noticed
Enjoy it while it lasts.
Despite what you may think when you see your weekly grocery bill, grocery prices are low—and not just because Amazon dropped prices at Whole Foods. In fact, we're currently in the midst of the longest deflation period for groceries since the 1950s, NPR reports.
Eggs, dairy, and beef prices plunged in 2016 and well into 2017. (Admittedly, in July, prices for these products crept up a tad—but year-to-year, grocery prices are still low.) In fact, according to the U.S. government, we saw 19 months straight of grocery price declines. The last time we saw prices so low for so long was in the 1950s, according to the data.
The economy is going strong—at least for the moment—so you might be wondering why grocery prices have dipped over the last year. The simple answer is something you probably learned in Economics 101: supply and demand. Farmers and ranchers are producing a lot of eggs, dairy, and beef, but consumers aren't purchasing those items at the same rates. In this common scenario, prices fall to encourage more purchases and get products off the shelves
Whether we're noticing the difference in our weekly expenses or not, we should enjoy the discounts while they last. NPR says that dairy prices are already starting to increase as the dairy price index is slowly starting to rise, along with many other foods. Grocery prices "will gradually go up," Jon Springer, retail editor at Supermarket News, told NPR. That's in part, he explained, because retailers will watch one another and drop or raise their prices so that they can stay competitive in the market.
Prices could rise by about one percent this year. That's not terrible, of course. But it's nice to know that—for the moment—groceries are giving us and our wallets a little bit of a break.