Going to the grocery store isn’t cheap anymore.
Rising food costs helped push inflation higher again last month, despite a drop in gas prices. The food index alone rose 11.4% over the past year, according to the latest consumer price index figures – marking the biggest 12-month jump since May 1979.
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The home food index, a measure of price changes at grocery stores, rose 13.5% – also a 43-year high.
Faced with higher prices, consumers are downsizing, according to Mark Hamrick, a senior economic analyst at Bankrate.com. However, “food, at its basic level, is not discretionary,” he said. “That’s the challenging aspect of the circumstances we’re in.”
Prices for staples such as eggs, milk, cereals, bread and butter saw some of the biggest increases, further straining household budgets.
Inflation has caused many food and beverage companies, including Coca-Cola and PepsiCo, to raise the prices of beverages and packaged goods. Some are also making their packages smaller — also known as “shrinkflation” — or swapping out less expensive ingredients, a tactic now called “skimpflation.”
“Food manufacturers know that while most shoppers will immediately notice a price increase, they are less likely to notice a reduction in a product’s net weight or a shift to using cheaper ingredients,” said Edgar Dworsky , founder of Consumer World, which has followed the downsizing of popular products such as Charmin, Quaker Instant Oatmeal and Honey Bunches of Oats.
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The Federal Reserve has already taken aggressive steps to combat rising inflation, and a survey released earlier this week by the New York Fed showed that consumers are growing less fearful of rising prices — though they still expect the rate of inflation to to be 5.7% per year from now. .
“Consumers are prepared for high prices to continue for the foreseeable future, but there’s also a tendency for people to think things can get back to normal,” Hamrick said.
In the meantime, “it is prudent for individuals to continue to be careful with their household budgets,” he added.
To that end, savings experts share their top tips for spending less on groceries as food inflation shows no signs of slowing down anytime soon.
“It’s time to tighten the belt and it has been for a while,” Hamrick said.
5 tips to save on food
- Review the sales. Generic brands can be 10% to 30% cheaper than their “premium” counterparts and just as good, but this is not always the case. Name brands may offer bigger discounts than usual now to maintain loyalty, so you should pay attention to price changes.
- Plan your meals. When you plan your meals in advance, you’re more likely to buy the things you need, said Lisa Thompson, a savings expert at Coupons.com. If planning isn’t your thing, at least go shopping with a rough idea of what you’ll be cooking in the coming week to help stay on track and avoid impulse buys, she added.
- Buy in bulk. When it comes to the rest of the items on your list, you can save even more by buying in bulk. Joining a wholesale club like Costco, Sam’s Club or BJ’s will often get you the best price per unit for spices and non-perishable goods.
- Use a cashback app. Ibotta and Checkout 51 are two of the most popular apps for making money at the store, according to Julie Ramhold, a consumer analyst at DealNews.com. The average Ibotta user earns between $10 and $20 a month, but the most active users can earn between $100 and $300 a month, a spokesperson told CNBC.
- Pay with the correct card. While a general cash back card like the Citi Double Cash Card can earn you 2%, there are specific grocery rewards cards that can earn you up to 6% back at supermarkets nationwide, such as sh. Blue Cash Preferred Card from American Express. CNBC’s Select has a full roundup of the best cards for grocery shopping along with APRs and annual fees.
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