Retail Food Price Inflation Varies by Location

New data from USDA’s Economic Research Service shows retail food price inflation varies by locality. From 2012 to 2021, increases in retail food prices ranged from an average of 2.4 percent a year in Honolulu, Hawaii, to 0.9 percent in the Dallas-Fort Worth, Texas, area. Retail food includes food bought in grocery stores as opposed to restaurants. Differences in transportation costs and retail overhead expenses, such as labor and rent, can explain some of the variation among cities because retailers often pass local cost increases on to consumers in the form of higher prices. Differences in consumer preferences among cities for specific foods may help explain variation in inflation rates, as well. For example, a city whose residents strongly prefer foods with less price inflation, such as fresh fruits and vegetables, might experience lower food-at-home price inflation than a city whose residents buy more beef and veal. Across the United States, prices increased by an average of 1.4 percent a year over the ten-year period.

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