Shoppers Eat Up the Markdown in Aisle 5

Decline in food prices offers relief at the grocery store


Shoppers are finally getting some relief at the grocery store after last year's steep rise in food prices.

Prices for dairy, meat, fruits, vegetables and bread have all fallen. And shoppers in North Texas say they have noticed.

"The prices have dropped," Jessica Berens, of Euless, said. "There's a lot more sales every weekend. It's probably a different fruit that's on sale, which, for a while, nothing was going down there."

And Malissa Nied, of Colleyville, said she's noticed that prices have come down lately.

"It does seem like the prices have gone down recently," she said. "I'd say within the last three months or so, it seems like they're dropping."

A Labor Department price index of food sold to be eaten at home fell for the seventh time in eight months in July. The index, which is part of the Consumer Price Index, fell 0.5 percent in the most recent month and is down 0.9 percent in the past 12 months.

In fact, overall food prices -- what's sold in groceries and in restaurants -- haven't risen on a monthly basis since November 2008.

North Texans said they welcome the price drops, even if they are small.

"I would say that it does help in the long run, if you're paying attention," Berens said.

Ples Robinson, of Euless, said prices are falling "just a little bit."

"It's in small increments and just like, by cents," Robinson said.

"Hey, every little bit helps," Nied said.

But the drop in food prices doesn't make up for last year's surge, when costs for ingredients such as wheat and corn and fuel costs for transportation soared to record highs. Food makers raised their prices and some even shrank package sizes to protect their profits. CPI's food-at-home index finished last year up 6.7 percent, so the less than 1 percent drop so far this year doesn't erase that.

But ingredient costs for major food makers, including Heinz, Kraft and Hormel, are down about 28 percent on average as of Sept. 1, from the same time last year, according to Jonathan Feeney, food analyst for Janney Montgomery Scott.

The factors that drive what consumers actually pay can vary wildly.

Weather, demand, oil prices and market competition all play a role. And each food category has its own economics of supply and demand. Falling prices for gasoline and transportation plus consumer resistance to price increases have helped drive this latest spiral downward.

Omar Villafranca contributed to this report.

Copyright AP - Associated Press
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