Retail inflation once far outpaced food inflation, but the trend has long since reversed.
The latest data on record from the U.S. Bureau of Labor Statistics (BLS) Consumer Price Index for All Urban Consumers (CPI-U) revealed that, in February, grocery prices were up 9% year over year, while retail prices excluding gasoline were only up 2%. This trend marks a dramatic departure from the patterns seen early in this inflationary period, when retail inflation far exceeded that of grocery. In January 2022, for instance, retail prices excluding gasoline were up a whopping 13% year over year, while grocery prices were only up by roughly half that amount, 7%.
Yet, shoppers’ expectations of inflation remain relatively constant across grocery and retail — specifically, they expect prices to continue to rise for the foreseeable future.
Research from PYMNTS’ study “Consumer Inflation Sentiment Report: Higher Prices Fuel a Deal-Seeking Competition,” produced independently by PYMNTS, which drew from a survey of more than 2,100 U.S. consumers, found that two-thirds of consumers said they believe retail prices will increase over the next year. Roughly the same share of those surveyed reported expecting grocery price increases.
In contrast, only roughly one in 10 consumers reported believing that retail prices would come down over the next year, and a similar share said the same of grocery prices. Meanwhile, about one in five consumers said they thought retail prices would remain the same, and one in four said the same of grocery.
Notably, the share of consumers expecting these price increases has decreased slightly since last summer, when three-quarters of shoppers reported expecting another year of price increases.
Yet, while the share may have fallen somewhat, it remains clear that, even as retail price increases have normalized, and even as grocery prices have skyrocketed comparatively, consumers remain more or less in agreement that, when it comes to inflation, the end is not yet in sight.
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