Food prices at home in June increased by more than 12%

Soaring food and fuel inflation pushed the Consumer Price Index (CPI) to a 40-year high in June, according to the US Bureau of Labor Statistics (BLS).

The CPI for all urban consumers rose 1.3% month-on-month (seasonally adjusted) in June, after increases of 1% in May, 0.3% in April and 1.2% in March, the BLS reported yesterday. On an annual basis, the inflation rate rose further, rising by 9.1% (unadjusted) for the month of June. That represented the largest 12-month gain in the CPI since the period through November 1981, the BLS noted. The June rally was also the highest in the 12 months so far in 2022, outpacing gains of 8.6% in May, 8.3% in April, 8.5% in March, 7.9% in February and 7.5% in January.

The BLS said its CPI for food, including food at home and food away from home, rose 10.4% year over year and 1% month-to-month and in June, up from related increases of 10.1% and 1.2% in May and 9.4 9% and 0.9% in April, 8.8% and 1% in March, 7.9% and 1% in February, and 7% and 0.9% in January.

The food-at-home index for June jumped 12.2% year-on-year, outpacing the 11.9% rise in May and representing the largest increase in 12 months since the period through April 1979, according to the BLS. That compares with steady increases since the start of the calendar year, including 10.8% in April, 10% in March, 8.6% in February and 7.4% in January.

US Bureau of Labor Statistics

All six major food group indices for groceries rose over the 12 months through June, with five of the six increasing more than 10%, the BLS reported. The index of other foodstuffs at home saw the largest increase of 14.4% year-on-year, with the index of butter and margarine climbing 26.3%. Increases ranged from 8.1% for fruits and vegetables to 13.8% for cereals and bakery products among other groups.

The monthly rise in the home food index remained sharp in 2022, up 1% in June after gains of 1.4% in May, 0.9% in April, 1.5% in March, 1.4% in February and 1% in January. The latest increase followed a rise of just 0.4% in December.

Meanwhile, the June Food Away From Home Index was up 0.9% month over month and 7.7% year over year, up from increases of 0.7% month over month and 7.4% year over year in May.

Excluding food and energy, June’s CPI rose 5.9% from a year ago and 0.7% from a month ago, roughly the same as 6% year-over-year and 0.6% monthly in May, according to the BLS. Sky-high energy costs remained the main catalyst in the June CPI jump, rising 41.6% y/y and 7.5% m/m. Gas and fuel oil prices are up 59.9% and 98.5% respectively compared to last year. Monthly changes were an increase of 11.2% for gas and 1.2% for fuel oil.

Numerator June 2022 Inflation report-product categories.jpg

A Numerator who specializes in consumer market data said that, for the four weeks ending July 3, grocery prices rose 15.1% year-on-year, above a 14.6% increase in late May and more than double the rate of grocery inflation at the start of 2022.

“As the cost of everyday goods continues to rise, consumers are shopping to find value,” Eric Belcher, CEO of Numerator, said in a statement. “Many of these transitions – including the trading of high-income households into dollar stores – are unexpected.”

The Chicago-based Numerator noted that the Internet remains the channel most affected by inflation. Online grocery prices are up 21.5% year over year in the four weeks to July 3. The dollar was the only other channel in this pace, with inflation at 19.8%. Wholesale clubs were the most stable in grocery prices during this period, with inflation at 9.9% versus 12.2% for supermarkets and 13.9% for wholesalers.

Consumer spending remains at a high level, although demand may fall, according to Bast. Overall expenditures are up 13% year over year for the four-week period, yet units per trip are down 13%, the lowest for 2022.

Spending in stores for the June period hit its highest level in 2022 with 24% growth, led by the club (+15%) and the dollar (14%). Numerator said an increasing number of consumers are looking for value and are turning to club stores. Across all income levels, home traffic at warehouse clubs is up 9% year over year over the four weeks.

Likewise, higher-income shoppers go to dollar stores, whose sales are up 14% from last year as customers increase trips (+4%) and spend per trip (+9%). The Numerator found that higher-income consumers boosted their dollar store spending by 13% over this period.

By category, beverages were the hardest-hit division of the grocery segment in terms of inflation, according to Numerator. Among the grocery bestseller categories, five beverage segments ranked in the top 10 for highest inflation during the June period. Overall in grocery, the sectors with the largest year-over-year inflation gains were frozen meat (+28%), potato chips (+26%), poultry (+25%), water (+22%), and milk/milk substitutes. (+17%).

The numerator added that the rate of inflation in household items has slowed. The consumer market researcher said that prices for household appliances in the four weeks ending July 3 rose 11.3% year-on-year, down 5.9 percentage points from mid-June, impacted by Amazon’s early Prime Day deals in the segment. Paper and plastic products were the household divisions most affected, with five sectors ranked in the top ten for the highest rates of inflation. Household products with the highest increases in inflation included facial tissues (+32%), plastic wrap and foil (+27%), brooms/mops/brushes (+27%), household batteries (+27%), and disposable tableware (+ 23) %).

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