Low retail food inflation to continue, USDA predicts
Despite above-average inflation for fresh vegetables, 2019 is expected to see retail food prices increase in a modest range between 0.5% and 1.5%, according to the latest government forecast.
That would make 2019 the fourth year in a row with deflating or lower-than-average inflating retail food prices, according to the U.S. Department of Agriculture’s Oct. 25 Food Price report.
The 20-year historical annual average for retail food price inflation is 2%, according to the USDA.
Last year, retail food prices rose 0.4%, the first increase in three years.
Restaurant food prices are now rising faster than supermarket food prices, the USDA said. The report said that while retail food prices and restaurant price inflation increased at similar rates from the 1970s to the early 2000s, restaurant food prices have increased at a higher clip since 2009.
Higher labor and overhead costs for restaurants largely account for the difference in cost structures, the report said.
For that reason, decreasing commodity and wholesale prices have influenced supermarket pricing more than restaurant prices, the report said.
In 2020, supermarket food prices are again projected to increase between 0.5% and 1.5%. Both fresh vegetables and fresh fruit are expected to see retail price increases in 2020 below the 20-year historical average, according to the report.
The USDA said restaurant food prices in 2020 are forecast to increase in a range between 2% and 3%, similar to recent years.
Related articles
Tame inflation predicted for retail food in 2019
What’s wrong with the produce markets?
Walmart, Hy-Vee battle for Midwest
