CPI shows 6th straight month of retail deflation
Price gap with restaurants grows in October
Prices at grocery stores declined on a year-over-year basis for the 11th consecutive month in October, and continued to contrast rising prices for food at restaurants, the U.S. Bureau of Labor Statistics said Thursday in a monthly update to its Consumer Price Index.
The CPI Food At Home index, a proxy for supermarket food sales, was down by 2.3% for the 12 months ended in October. Food Away From Home increased by 2.4% for the same period.
In October, the Food at Home index declined by 0.2% from September, and marked the sixth straight month of deflation at retail. The Food at Home basket was mixed during the month, with prices for meat, poultry, fish and eggs down by 0.7% from September, nonalcoholic beverages down by 0.4% and other items down by 0.1%. Cereal and bakery prices were flat. Fruits and vegetables ( 0.2%) and dairy ( 0.3%) showed small increases from September.
Restaurants by contrast saw prices tick up by 0.1% from September, the bureau said. Some analysts have blamed the widening price gap between supermarket and restaurant prices for struggles among the latter group, although supermarkets have generally struggled to turn increased traffic into greater volumes and profits, particularly since May when their lower input costs hit the shelf.
October marked the 14th straight monthly decline for meat, poultry, fish and eggs, a phenomenon some analysts attribute to effects of a stronger U.S. dollar that slowed food exports and led to an oversupply that reduced prices domestically. Bill Kirk, an analyst at RBC Capital Markets, in a research note Thursday said the Producer Price Index, released earlier this week, although down by 3%, indicated its protein subcategories were improving.
Kirk projects an increase in food exports could lead to improvement in the CPI by May.