Inflation in retail food prices trending down

Historically, grocery store food prices have generally risen each year. However, in 2016, retail food prices actually fell 1.3 percent and fell again in 2017 (0.2 percent). These back-to-back years of food price deflation helped lower the 20-year moving average for grocery store price inflation from 3.6 percent in 1999 to 2.0 percent in 2018. Beginning in 2015, increased U.S. production of agricultural commodities, such as beef cattle and eggs, and lower energy prices contributed to the 2016 and 2017 decreases in retail food prices. In addition, a strong U.S. dollar since 2014 made imported foods (i.e., many fruits and vegetables, fish, and sugar) less expensive. Another contributing factor to low retail food price inflation in recent years may be stepped up competition on the basis of price for U.S. consumers’ food dollars. — Economic Research Service