If you’ve recently visited your local grocery store, you may have noticed some discernible price increases.
The cost of nearly every good and service is up, which means food is directly impacted. Not only is it more expensive to grow and procure many foods, but it’s also expensive to transport it, cool or prepare it and store it. Going out to eat at a restaurant is pricier now, too.
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The most recent Consumer Price Index (CPI) for December shows prices rose for many goods and services by 0.4%. This places the 12-month inflation rate at 2.9% — the upper end of analyst forecasts. Most had foreseen the report coming in at between 0.3% to 2.9%.
Here’s a look at how some of our core materials and services changed in December compared with the previous month:
- Food: up 0.3%
- Food at home: up 0.3%
- Food away from home: up 0.3%
- Energy: up 2.6%
- Gasoline: up 4.4%
- New cars: up 0.5%
- Used cars: up 1.2%
- Apparel: up 0.1%
- Shelter: up 0.3%
- Transportation: up 0.5%
- Medical care: up 0.2%
- Medical Care Commodities: 0.0%
Nearly everything was up compared to November 2024, with the exception of medical care commodities, which remained unchanged for the month. Energy, gasoline, automobiles and trucks, and transportation were up at least a half a percentage point or more.
Walmart
Walmart and Amazon offering discounts on staples
It’s hard to make a dent in persistently high grocery bills. Particularly when the cost of some protein essentials, like eggs, are higher thanks to several issues, including the spread of bird flu and supply chain issues.
“Out of nine grocery staples defined by the Bureau of Labor Statistics, the cost of a dozen eggs increased the most over last year [2023], from $2.06 to $3.82, up 85.0%,” according to USA Facts.
“Other grocery staples that cost more this year include beef, chicken, tomatoes, whole milk, and bread. Beef, chicken, tomatoes, and whole milk increased more than the 1.3% average for groceries,” also from USA Facts.
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Since the price of many essentials and consumer staples are up, some retailers are getting crafty about their offerings.
In 2024, Walmart (WMT) announced it would roll back the price of many items in its stores, returning them to pre inflation prices. Amazon’s AMZN Whole Foods has also been offering deeper discounts to Prime shoppers, changing its sale items weekly in the hopes of tempting customers to return.
Private labeling is one tactic that reigns supreme
But shoppers have found at least one way to help tame the price of food.
According to a new Circana report, the sale of private label goods, also known as generic, “owned,” or in-house brands that many grocers offer using their own labels, is up by a record in 2024.
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Sales of in-store brands increased by 4% to $271 billion in 2024, indicating shoppers prized cost over brand names in many cases.
Brand name labels, also known as national brands, were up 1% by comparison.
It comes at a predictable time. While 2024 saw many customers trimming their budgets and looking for deals, last year also saw plenty of retailers introducing or beefing up their private labels in the hops of luring more customers and keeping profits closer to home.
Walmart introduced Bettergoods, Kroger introduced Field & Vine, and Amazon introduced Amazon Saver. Target also continued to bolster its in-store brands, bringing its total tally to over 45 Target brands. And Costco COST continues to have success with its popular Kirkland brand, which accounts for about one third of Costco’s annual revenue.
And the tactic is working. Since 2021, Circana found that sales of private labels have risen 2%, while national brand names have decreased by 7%.
The trend goes beyond just food, too. Circana noted that all 10 food and nonedible categories saw revenue growth.
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