U.S. grocery prices surged 11.4% in 2022, the sharpest increase in 50 years, but have not reversed course since, illustrating the economic phenomenon known as rockets and feathers, where prices rise rapidly but fall slowly. The U.S. Department of Agriculture forecasts grocery prices will rise 2.7% this year, above the 2024 and 2025 levels but close to the historical average of 2.6%. This persistent elevation is driving consumers toward store brands, whose total sales reached a record $282.8 billion in 2024, and toward discount retailers like Costco, Walmart and Aldi, which are gaining market share from traditional grocers. Key contributing factors include a 54% rise in coffee prices since 2019 due to climate issues, and a 19.5% spike in fresh tomato prices in June stemming from a 17% import tariff on Mexican produce.
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