{"id":784074,"date":"2026-07-25T17:26:12","date_gmt":"2026-07-25T17:26:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/784074\/"},"modified":"2026-07-25T17:26:12","modified_gmt":"2026-07-25T17:26:12","slug":"rockets-and-feathers-economists-say-grocery-prices-shoot-up-like-the-first-fall-like-the-second","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/784074\/","title":{"rendered":"‘Rockets and feathers’: Economists say grocery prices shoot up like the first, fall like the second"},"content":{"rendered":"

Economics has a term for what\u00a0U.S. grocery prices<\/a>\u00a0have done in recent years: rockets and feathers.<\/p>\n

Rockets, because the cost of food eaten at home zoomed up in the aftermath of the pandemic. Feathers, because once prices rise, they\u2019re slow to come down.<\/p>\n

That\u2019s been frustrating for Americans hit with the sharpest increase in grocery prices in 50 years. While food price inflation peaked in 2022, when prices jumped 11.4%, prices have not reversed course. An acceleration in flation after the U.S. and Israel\u00a0attacked Iran<\/a>\u00a0has prolonged the aggravation.<\/p>\n

\u201cI think the public is coming to grips with, \u2018Well, I\u2019m hearing inflation has slowed, but things aren\u2019t getting any cheaper.\u2019 It has to be deflation for prices to go down, and that\u2019s very rare,\u201d said Matt Hamory, who leads the global grocery practice at the consulting company AlixPartners.<\/p>\n

Prices for food at home are expected to rise 2.7% across the country this year, the U.S. Department of Agriculture reported Friday. That\u2019s higher than the grocery inflation shoppers saw in 2024 and 2025 but close to the historical average of 2.6%.<\/p>\n

It\u2019s the compounding effect of the\u00a0post-pandemic price shocks<\/a>\u00a0that consumers are still feeling, and they\u2019re reacting to them in ways that could have repercussions for the U.S. economy.<\/p>\n

A recent study by the consulting firm Bain & Co. and the market research company NielsenIQ said the number of items purchased at U.S. grocery stores declined in the second half of last year and dropped more sharply starting in February of this year. The study said high gas prices, rising GLP-1 usage and cuts in the number of people receiving government food aid are all affecting grocery spending.<\/p>\n

Consumers are also looking for deals and shopping around to find them. In the second quarter of this year, discounters like Costco, Walmart<\/a> and\u00a0Aldi<\/a>\u00a0took market share away from traditional grocers like Kroger<\/a> and Albertsons<\/a>, according to Numerator, a market research firm.<\/p>\n

Many U.S. shoppers are also replacing name-brand products with\u00a0store brands<\/a>\u00a0to save money. Total sales of store brands at supermarkets, drugstores and other retailers grew to a record $282.8 billion last year, the Private Label Manufacturers Association said.<\/p>\n

\u201cNow that this option becomes available, why would I go back? You have the convenience, it\u2019s the same, but my cost is 40% less and it\u2019s a brand that I know and trust,\u201d said Sean Hooper, a senior solution principal at Relex Solutions, a retail and grocery consulting firm.<\/p>\n

Prices rocketed up for lots of reasons in the wake of the pandemic, from the\u00a0war in Ukraine<\/a>\u00a0to a highly contagious\u00a0bird flu<\/a>\u00a0that pushed retail\u00a0egg prices<\/a>\u00a0to\u00a0record highs<\/a>\u00a0last year. And when prices rocket upward \u2014 whether for food, gas or other items \u2014 consumers can count on a slow, downy descent.<\/p>\n

For one thing, retailers are reluctant to lower prices on inventory they ordered when wholesale prices were high, said Jared Bernstein, a senior policy fellow at the Stanford Institute for Economic Policy who served as chair of President Joe Biden\u2019s Council of Economic Advisers.<\/p>\n

Stores and food companies also want to maximize their profits and were reluctant to give up some of the sales gains they saw after the pandemic, Bernstein said. PepsiCo\u00a0hiked its prices<\/a>\u00a0by double-digit percentages for eight straight quarters in 2022 and 2023, for example, citing higher ingredient and packaging costs. After customer demand faltered, the company began\u00a0lowering prices<\/a>\u00a0on some snacks last year.<\/p>\n

Customer behavior also can contribute to prices staying elevated. When prices spike, people shop around for lower ones. But consumers often stop deal hunting when they see prices coming down, giving retailers less incentive to lower prices even further.<\/p>\n

\u201cThere\u2019s less competitive force on the feather side of the mountain,\u201d Bernstein said.<\/p>\n

In some cases, grocery inflation is the result of long-term issues with no quick fix. Consider the average price of\u00a0coffee<\/a>, which has risen 54% in U.S. cities since 2019, according to government data. Climate issues \u2014 including drought in Vietnam, heavy rain in Indonesia and hot, dry weather in Brazil \u2014\u00a0are blamed for reducing coffee yields<\/a>\u00a0and driving up global prices.<\/p>\n

In other cases, there are clearer causes and simpler fixes. For example, U.S. consumers paid 19.5% more for\u00a0fresh tomatoes<\/a>\u00a0in June compared to a year earlier due to a\u00a017% import tax<\/a>\u00a0the Trump administration placed on fresh tomatoes from Mexico. Coffee was subject to a tariff for most of 2025 as well, but the duty was\u00a0eventually removed<\/a>.<\/p>\n

Hamory said the feather may be starting to fall as big retailers invest in price cuts. In early July,\u00a0Walmart<\/a>\u00a0said it was rolling back prices on ground beef, corn, red cherries, ice cream, potato chips and Coca-Cola<\/a> and Pepsi products. Target<\/a> also cut prices on some foods in March.<\/p>\n

\u201cIf the big guys are really investing, saying, \u2018That\u2019s what I need to do to get right with my customer,\u2019 that will force others in the market to act,\u201d Hamory said. \u201cIt\u2019s just in the process of starting, but that\u2019s a thing we could be seeing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Economics has a term for what\u00a0U.S. grocery prices\u00a0have done in recent years: rockets and feathers. Rockets, because the…\n","protected":false},"author":2,"featured_media":784075,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101,25138,2402],"class_list":["post-784074","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-grocery","tag-inflation"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/784074","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=784074"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/784074\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/784075"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=784074"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=784074"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=784074"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}