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Consumer still struggling with higher grocery prices as inflation rate moderates
Consumers this summer paid slightly higher prices for groceries as the overall inflation rate remained steady, at 0.2%.
SAN JOSE, Calif. - Supermarket sticker shock is top of mind for Bay Area residents, according to a report by think tank Joint Venture Silicon Valley. It takes first place, ahead of other categories hit hard by inflation including housing costs and utility bills.
In response to a survey asking, "Which of the following do you think have increased the most in cost for you over the past year?" groceries and food topped the list at 64%, followed by housing at 50%, utilities at 33%, restaurants and entertainment at 28%, taxes at 25%, health care at 23% and home insurance at 22%.
Joint Venture conducted its poll in August, surveying 1,750 residents from Alameda, Contra Costa, Santa Clara, San Francisco and San Mateo counties.
Consumers are accurately diagnosing their pain with groceries in the Bay Area posting the biggest annual jump of any category at 4.3%, according to U.S. Bureau of Labor Statistics data cited by the Joint Venture report. It's far ahead of housing at 2.3% and the overall regional inflation rate of 2.5%.
In another unfortunate example of the Bay Area leading the United States in cost of living, grocery prices jumped 26.8% in the past five years compared to 24.7% nationally.
Bay Area food prices
Russell Hancock, Joint Venture president and CEO, said he isn't surprised by the results from the annual opinion poll because consumers confront higher grocery prices every time they go to the supermarket, unlike a monthly mortgage or rent payments.
"Housing is an affordability issue but in one sense it's also a one-time issue, while food prices have been rising precipitously," Hancock told San Jose Spotlight.
On average, he noted, Bay Area residents pay about half their income for housing compared to the national average of 30%.
"That's why even a modest uptick in food prices can be a big deal, especially for low-income residents," Hancock said.
Specific examples of nationwide grocery price increases in the past year, flagged by Joint Venture, include coffee up 19%, beef up 15% and bananas, up 7%. Even Halloween was more expensive, with candy prices jumping 10% from 2024.
Store owners facing hardship
What they're saying:
Supermarket owners are also feeling the pain.
Troy Tibbils, general manager of Zanotto's Markets, with two stores in San Jose and one in Sunnyvale, said price increases from wholesalers have been nonstop recently, along with rising business costs such as payroll, rent and utilities.
"Things are just happening in a much shorter time span," Tibbils told San Jose Spotlight. "Instead of prices holding steady for three or four years, they're jumping every 12 months."
Zanotto's customers are "maybe a little bit numb right now" to supermarket inflation, Tibbils said. But he's noticed some switching away from higher priced items, such as beef, toward more affordable chicken, pork and vegetables.
The Source: This story was reported by the San Jose Spotlight.