When the coronavirus hit, people panicked, and they stock piled groceries. This resulted in grocery prices being driven up. However, while the virus continues to rage, the position of normalcy it has found in American society has meant fewer concerns about food shortages. As such, stock pilling has decreased. However, grocery prices continue to rise. In fact, August was the second most expensive month for groceries this year, only beaten out by May.
The national average for a basket of 37 representative goods—which is used to compare prices of goods over time—was $138.78 in May at its peak, then dropped to $136.40 in June and July, then resurged in August to $138.63.
Not every good has been impacted equally, and the same goes for price differences across different regions. On average a chicken breast cost 30 cents more, however in Miami a 30% increase of $1 was experienced, and a 20% increase in LA led to a 60-cent increase.
What has caused this shift towards more expensive groceries? Economist weighed in to give their analysis. They found that “promotions offered to consumers continue to be suppressed below their pre-COVID-19 levels for the fifth month straight.” The Nielsen analyst, Phil Tedesco, continued to say, “August saw a dip in this crucial metric from July, which is what has caused this month to be more expensive than in recent months.” He completed his statement with the assessment that “this means deals and offers to shoppers are less available, driving up the cost of the same basket of groceries.”
The overall impact of these shifts in prices is an average increase in the amount spent on groceries totaling to $400 or more per year. While this may not seem like a significant amount, and will largely be negligible for many families, lower income individuals will inevitably experience harsher ramifications.
Erik Hembre, Assistant Professor of Economics at University of Illinois at Chicago, maintains the difficulty lower income households will experience. He said, “recent increases in food prices during the pandemic affect lower income households more because they spend a greater share of income on food at home.”
It is clear that the pandemic has taken a disastrous toll on society. Unemployment skyrocketed, the stock market has wavered, and now food prices continue to climb. What once looked like it would be a minor blip in the economy has now revealed to be a much larger problem.
Leave a Comment