Yahoo Finance Inflation: Grocery prices are 'hitting everyone hard,' and shoppers aren't happy
LOS ANGELES — The rising costs of food has forced Rick Romero to change his shopping habits.
"Between the cost of food, the cost of fuel — it's hitting everyone hard, and we're not getting any compensation at work to try to balance it out," the L.A. resident told Yahoo Finance. "I buy the same items pretty much every week and it's gone up, $70 bucks or so a week now."
His experience is being shared by shoppers across the country who are facing sticker shock on almost all types of groceries. According to the Labor Department's U.S. Consumer Price Index report, the index for eggs increased 10.3 percent in April alone.
"We have to rebalance [our] budget," Romero added. "We have to constantly redo a budget every time. It's not like before where you set a budget and you're good. You have to rework it now."
Food inflation is a clear trend amid the overall rise in prices.
"The food at home index rose 10.8 percent over the last 12 months, the largest 12-month increase since the period ending November 1980," the Labor Department's April Consumer Price Index (CPI) report stated. "The index for meats, poultry, fish, and eggs increased 14.3 percent over the last year, the largest 12-month increase since the period ending May 1979."
The May numbers weren't much better: Costs for food jumped 10.1% from a year earlier while food in the at-home category rose 11.9% — the highest increase since April 1979. All six food at-home categories also increased year-over-year, with five jumping by more than 10%. At 14.2%, meats, poultry, fish, and eggs saw the biggest spike — a whopping 32.2%. Fruits and vegetables saw the smallest hike at 8.2%.
The overall CPI index, a closely watched measure of what Americans pay for goods and services, increased at an annual pace of 8.6 percent through May — the fastest rate in four decades.
Jessica Merick, a grocery shopper at Walmart, emphasized beef’s dramatic price increase.
"Meats in general, like chicken breast and steaks and any kind of meat has really gone up a lot, ground beef, just all those simple things that you can make a meal with have gone up like dramatically," Merick, a single mother of two kids, told Yahoo Finance.
"I definitely have changed some of my stuff and made sacrifices for like the cheaper prices on the generic stuff or sometimes it is the store brand," she added. "I'll choose to do that instead of like the name brands. It saves a couple of dollars, and it's necessary right now."
New research from Cowen found that inflationary pressures are hitting the consumer hard: 75% of 2,500 respondents in May said that prices for day-to-day purchases were up compared to a year ago, an increase from 60% in February.
"In total, 47% are cutting or expect to cut spend given higher prices, up sharply vs. 42% the prior month, Cown added. "Also, 53% said savings were down in May, up from 46% in March."
In terms of where responders were cutting back spending, according to Cowen, Groceries trailed only Social Events/Dining Out and Travel/Transportation.
"We're still holding up but I feel a different type of way for people that can't make ends meet, [and need] to buy groceries or gas," Ruben Vasquez, a father of five children, told Yahoo Finance. "It's pretty tough."
As a consequence of the rising cost in food shopping, Romero has even considered moving totally to other options instead of bringing home groceries.
"I'm actually looking at the cost of buying out, like getting a pizza versus bringing home some chicken and cooking it up [or] barbecuing or whatever," Romero said. "I'm thinking that might be a better way to go because the cost of a chicken is package of chicken is $13 [to] $14. You can get a pizza probably less, so I'm thinking about going that route."
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv
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