Economist Writing Every Day

Last week I gave some advice on how to save money on food. Food prices are up a lot in the past 4 years, but especially since the beginning of 2021. Over the 32 months since January 2021, grocery prices (according to the CPI) are up 20 percent (keep that number in mind). To give you an idea of how unusual that is, in the 32 months before the pandemic (up to January 2020), grocery prices only rose 2 percent. Perhaps even more astonishingly, if we look at October 2019 grocery prices, they were slightly lower on average than 4 years earlier in October 2015. From a flat 4 years to a 25 percent increase over the next 4 years. That’s a huge change for consumers.

But we also shouldn’t overstate the price increases. As you might guess, the best place for overstatements is social media. You can find plenty of them. For example, this very viral video claims that her family’s grocery prices doubled (in fact, almost exactly doubled, to the penny, which is suspicious) in just one single year, from August 2021 to August 2022. According to the CPI data, grocery prices were up 13.5 percent over that period — which, don’t get me wrong, is a lot! But it’s not 100 percent. I’ll focus on this one example, but I’m sure you will believe me that you can find dozens of examples like this on social media every single day (for example, yesterday someone claimed bread prices had tripled since 2019).

Let’s leave aside for a moment that in that viral video she claims to spend $1,500 per month on groceries. This would be a massive outlier for 2022. A family in the middle income quintile spent $460 per month on groceries in 2022, and $713 on all food including restaurants. So even if this family eats every single meal at home, they are still spending twice as much as a middle income family. Even a family with 5 or more people (the largest bucket BLS uses in that report) spent $755 per month on groceries ($1,232 on all food). According to the Consumer Expenditure survey, the middle quintile grocery spending went up 16%, and the five-person household went up 19% from 2021 to 2022. Big increases, no doubt! But not 100%.

So who are we to believe? Have prices roughly doubled since 2021? Or are they up about 20 percent? People are sometimes skeptical of the consumer price index, so let’s look at the actual price data that goes into the index. BLS has data on hundreds of individual food items, but here’s a summary chart with eight common food items. Here’s the change in the prices of those items since January 2021:

• Eggs: +40.9%
• Bread: +27.6%
• Oranges: +25.6%
• Ground chuck: +20.3%
• Chicken: +19.2%
• Milk: 14.3%
• Bananas: +4.7%
• Tomatoes: -4.4% (deflation!)

Notice that none of these prices have doubled. If we do an unweighted average, these 8 goods are up 18.5%. A weighted average (using CPI weights) puts us at 20.3% — hey, that’s almost exactly what the CPI says for groceries! We tend to remember things that went up, such as eggs being up over 40 percent. But consumers spend almost as much on tomatoes as they do on eggs, and we don’t notice that tomatoes are actually down 4.4 percent. And the big ticket items here, beef and chicken, are both up right around 20 percent.

So, it seems, 20 percent is about right.

But maybe you’re still skeptical. Perhaps you think that the BLS data is still understating price increases for some reason. I’m not aware of any other comprehensive database of food prices, so we are inevitably descending into the realm of anecdotes! But let’s try. Here’s an anecdote from me, with a Sam’s Club receipt that I still have from January 2021 (sorry, my Kroger and Walmart history don’t show receipts that far back). The level of Sam’s Club prices are usually lower, since you are buying in bulk, but I don’t think there is any reason to believe that the increase in prices should be biased in either direction.

As always, I try to bring the receipts, so my receipt is posted here too. I have only included items that are still available currently at my Sam’s Club location, and I have double-checked to make sure they are the same size (so no shrinkflation here).

I was able to find comparable prices for just over half of the 15 items in my January 2021 receipt at the same store. To purchase this same basket of goods, it would be 17.6 percent more today than January 2021. That’s a lot, but… it’s not 100 percent. As I note, one item is on sale (but isn’t something always?), so if I ignore the sale price, the increase is… 20.1 percent. Almost exactly what BLS says! The magic 20 percent.

My point here is not to claim that my experience is somehow representative of the national average. That’s what the BLS data are for! But rather, for me personally, when I hear “grocery prices are up 20 percent since January 2021” this feels… pretty much right. Yes, I will notice that my kids’ Dino Nuggets are up 40%! But if I am a careful shopper, I’ll also notice that my Ahi Tuna is up just 3 percent. And on sale, the Turkey Sticks are actually cheaper than January 2021.

But put it all together and it’s about 20 percent.

If you have other anecdotes that are a lot more (or less!) than a 20 percent change since January 2021, please share them here. But bring the receipts!