Why food prices are still high, five years after COVID
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Sticker shock at the grocery store became a fact of life during the pandemic as food prices skyrocketed.
Why it matters: Higher prices have been unavoidable ever since — but five years since the start of COVID, new tariffs and retaliatory action could cause food prices to rise again.
The big picture: Food prices increased by 23.6% from 2020 to 2024, outpacing overall inflation of 21.2% during that period, according to the U.S. Economic Research Service.
- It was a story of supply chain disruption and demand eruption, and their complex interplay.
- Supply chains broke, costs rose for raw materials, energy and labor — and shoppers paid in the end.
Friction point: Consumer advocates accused grocers and food companies of raising prices to bolster the bottom line, but there's little "concrete evidence" of excessive prices, CFRA Research analyst Arun Sundaram tells Axios.
- "Profit margins for retailers as well as packaged food companies have remained relatively stable over the years," he said. "They're not increasing prices past the amount costs have gone up."
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