Supermarket Inflation Rate Slows Slightly, CPI Shows

Retail prices in U.S. supermarkets were up by 4% in October on a year-over-year basis, a slight deceleration from the 4.1% rate of price increases recorded in September, according to new figures from the U.S. Bureau of Labor Statistics.

The Bureau’s Consumer Price Index for food-at-home, a proxy for U.S. supermarket inflation, was up by 0.1% in October vs. September as four of the six major categories it tracks showed increasing prices, led by a 0.4% rise in meat, poultry, fish and eggs vs. a 0.4% decline in September. The indexes for other food at home and for cereals and bakery products both rose 0.3% in October, while the index for fruits and vegetables increased 0.1%.

The index for dairy and related products fell 0.9% in October, the largest monthly decrease since January 2015. The index for nonalcohol beverages also declined in October, falling 0.1% over the month.

Year over year, prices were up in all categories, although the rates of increasing retail prices varied. Cereals and bakery products were up 3% year over year (vs. 2.6% in September). Meats, poultry, fish and eggs were up 6.1% (vs. 6.3% in September); dairy and related products were up by 3.8% (vs. a 5% gain in September); fruits and vegetables were up by 2.6% (vs. 3% in September); nonalcoholic beverages climbed by 4.4% (vs. 4.2% in September); and other food-at-home products rose by 3.4% year over year (vs. 3.2% in September).

Retail price inflation supports comp sales, which in turn allows retailers to achieve greater leverage on fixed costs and ultimately, support profits.

The Consumer Price Index for food away-from-home, or restaurant inflation, was up by 0.3% in October vs. September—also representing a rate deceleration from 0.6%—with prices up by 3.9% vs. last October. Within that category, limited service establishments saw a 5.7% year-over-year increase, while full-service meals and snacks increased by 2.8%, the Bureau statistics show.