By Jim Dudlicek / NGA Director, Communications and External Affairs
I don’t think anyone’s expecting inflation to go away in one huge pop, so with folks everywhere continuing to stress about high prices at the grocery store, any gentle hiss is a welcome relief.
So, it was great news when announced recently amid the 4% increase in the Consumer Price Index for May, food prices rose just 0.2% overall.
Even better, the food-at-home index (i.e., grocery store prices) rose by just 0.1% compared to a 0.5% lift for food away from home (i.e., restaurants).
Most significant during this latest reporting period: The index for eggs fell 13.8%, which the Bureau of Labor Statistics says is the largest decrease in that index since January 1951. This is sure to bring huge sighs of relief for a segment beset by soaring prices and supply challenges since last December. To be sure, we’re seeing normalcy returning to the egg case, with some grocers even putting them on sale.
Of course, independent operators have endeavored all along to secure the best values for their customers to minimize pocketbook pains, so this easing of CPI ought to make that a little easier. Overall, the index that includes meat, poultry and fish as well as eggs decreased 1.2% in May, while dairy eased 1.1% and bakery was unchanged. Fruits and vegetables rose 1.3% while nonalcoholic beverages edged up 0.7%.
Meanwhile, the index for food away from home rose 0.5%, as consumers continue to dig deeper when eating out and share their frustrations on social media with tales of $16 burger combos at their local fast-food joint.
Our friends at FMS Solutions offer this assessment: “Given these economic fluctuations, independent grocers must remain adaptable and responsive. This recent CPI report provides some much-needed optimism, offering a way forward for independent grocers working to navigate the challenges of food price inflation.”
The message to your customers should be that, amid the economic turmoil, the grocery store still delivers the best value and variety for your food dollar. Driving that message home is important, as consumers struggle with high prices for practically everything. And it’s a woe shared by consumers and retailers alike. Sure, the gasoline index decreased 5.6% in May, but with reports of an OPEC production cut looming as the summer travel season begins, that’s not likely to last long.
Be transparent. Offer solutions. Keep taking the pulse of your customers. Independent grocers are the heart of the community, but customers keep the blood flowing.