2019 is expected to see retail food prices increase in a modest range of between 0.5 percent and 1.5 percent, despite above-average inflation for fresh vegetables.
The would result in 2019 being the fourth year in a row with deflating or lower-than-average inflating retail food prices, according to the USDA’s recent Food Price Report.
The 20-year historical annual average for retail food price inflation is 2 percent. Last year, retail food prices rose 0.4 percent, the first increase in three years.
Restaurant food prices are now rising faster than supermarket food prices, while retail food prices and restaurant price inflation increased at similar rates from the 1970s to the early 2000s. Restaurant food prices have increased at a higher clip since 2009.
Higher labor and overhead costs for restaurants largely account for the difference in cost structures, the report said.
For that reason, decreasing commodity and wholesale prices have influenced supermarket pricing more than restaurant prices, the report said.
In 2020, supermarket food prices are again projected to increase between 0.5 percent and 1.5 percent. Both fresh vegetables and fresh fruit are expected to see retail price increases in 2020 below the 20-year historical average, according to the report.
The USDA reports restaurant food prices in 2020 are forecast to increase in a range between 2 percent and 3 percent, similar to recent years.