U.S. Grocery Inflation Holds at 2.7% as Shoppers Shift to Frozen Produce
Updated
Updated · Morning Brew · Jul 17
U.S. Grocery Inflation Holds at 2.7% as Shoppers Shift to Frozen Produce
3 articles · Updated · Morning Brew · Jul 17
Summary
June grocery inflation held at 2.7%, but shoppers still cut back, with fresh produce purchases falling while frozen fruit and vegetable buying increased.
Nearly 5% higher fresh-produce prices versus a 2% rise for frozen items helped drive the shift, underscoring how consumers are chasing value despite moderate headline inflation.
Grocers face a tight squeeze: they need low prices to retain budget-conscious shoppers, yet have limited room to cut further without hurting profitability.
Rising energy costs from the Iran war pose the bigger near-term risk to food prices, even as tariffs have had only a muted effect on grocery inflation so far.
The pattern extends a broader slowdown in food retail, with June grocery unit sales previously reported down 1.8% as prices remain far above pre-2019 levels.