As inflation continues to fall, most consumer goods are getting a break from their sky-high prices - except for groceries. According to a recent Morning Consult report, food inflation is consumers' top economic concern. Kayla Bruun, senior economist at Morning Consult, joined TheStreet to discuss why your supermarket trips are still a pain for your wallet.
Full Video Transcript Below:
J.D. DURKIN: A recent survey from Morning Consult finds that consumers are most concerned about rising grocery prices help break this down help us understand what exactly is going on here, Kayla.
KAYLA BRUUN: So really, the impetus for this survey was digging into sort of what we had seen as a bit of a disconnect between what was going on with consumer sentiment and what we were seeing in the actual economy, which was largely a lot of improvement, especially over the second half of 2023. So that was kind of why we we wanted to dig into this question of what about the economy was a drag on sentiment. And so we listed a whole bunch of factors, I forget maybe 15 different factors and including inflation overall, but also specifically looking at costs for things like grocery prices, food prices, and across the board, really pretty much no matter how you slice it, by demographic.
Food prices were always right up there as that top concern. And what was interesting is it wasn't just about food inflation. It was really about those price levels. And if you look back at what we've seen over the past few years with food prices, it kind of makes sense because the CPI for food at home, which is sort of what we would look at as grocery prices, it's jumped about 25% since the pandemic started. So, you know, over that four year period at 25% jump, if you look back at the 4 years before that, it was more like a 1% jump for grocery prices. So that's new, it's very different from what consumers are used to. And we're really seeing that in the numbers.
J.D. DURKIN: With inflation continuing to fall, why are groceries still so painfully expensive?
KAYLA BRUUN: Well, food inflation actually has come down a lot there right now for the inflation rate for food is really only about 1% year over year. So the pace of price growth has really calmed down. But what I think consumers are really struggling with is just the run up that we already saw that's kind of already baked in, because if you think about it, if you're a business, you're not going to want to lower those prices. And many businesses actually during the times when there were these supply disruptions and true cost factors that were driving up prices, they maybe had to sort of swallow some of these losses and things like that.
So there was really just a lot of disruption over the last few years with supply chain disruptions and things like that. Shortages, egg prices were crazy. You know, there's been a lot of different factors. If you go category by category with food and we're really still kind of seeing the tail end of that, the environment is more normal now, but it's already baked in. What price is, the price levels that are very high and still kind of giving a pinch to some consumers.
