Food-at-home prices decreased 0.1 percent in July and are up 2.7 percent over the last 12 months, a 12-month rate unchanged from June, according to Consumer Price Index data released Aug. 12 by the U.S. Bureau of Labor Statistics. FMI – The Food Industry Association said the report extends the cooling trend that began in June and offers welcome relief for grocery shoppers.
The July numbers arrive as overall inflation continues to ease. The all-items CPI rose 0.1 percent for the month, and the annual rate slipped to 3.4 percent from 3.5 percent in June. Three of the six major grocery store food group indexes declined in July, led by a 0.7 percent drop in the meats, poultry, fish and eggs index.
“July’s food price inflation figures continue the period of cooling we experienced in June, which should be welcome news for grocery shoppers,” said Andy Harig, VP of tax, trade, sustainability and policy development at FMI. “Notably, key staple categories saw decreases for the month. The 0.7 percent decline in animal proteins, 0.1 percent decrease in fruit and vegetable prices and 0.1 percent drop in dairy products should give grocery shoppers some relief as they seek to stretch their dollars.”
Grocery holds its value edge over restaurants
The report also reinforced the value advantage grocery retailers hold over foodservice. While food-at-home prices declined for the month, the food-away-from-home index rose 0.3 percent in July and is up 3.4 percent over the last 12 months, compared with 2.7 percent for groceries. Limited service meals climbed 0.4 percent for the month, and full service meals rose 0.2 percent.
Within the store, category performance was mixed. Pork prices fell 1.5 percent in July, and lettuce dropped 16.4 percent after supply-driven spikes earlier in the summer. The nonalcoholic beverages index rose 0.9 percent, rebounding from a 1.5 percent decline in June, while cereals and bakery products edged up 0.2 percent.
Over the last 12 months, fruits and vegetables remain the biggest source of pressure at the shelf, up 5.1 percent, followed by nonalcoholic beverages at 4.1 percent, with coffee up 10.3 percent for the year. Beef and veal prices are 9.4 percent higher than a year ago. On the other side of the ledger, egg prices are down 25.7 percent from July 2025, and the dairy and related products index has fallen 0.5 percent over the year.
Energy, weather remain wild cards
The monthly decline in grocery prices came despite renewed volatility in global energy markets, which touch every stage of the food supply chain, from farm equipment to processing, packaging and transportation. The energy index fell 1.5 percent in July but remains 14.7 percent higher than a year ago, with gasoline up 24.6 percent over the same period.
“This decline is despite the spike in energy prices following the resumption of conflict in the Strait of Hormuz,” Harig said. “However, it is worth continuing to keep an eye on developments in the region, as well as the El Niño weather pattern and other ongoing supply chain challenges that could put upward pressure on grocery prices in the months ahead.”
Shoppers stay focused on value
Even with inflation cooling, consumers are still shopping with their budgets front of mind, and they are giving their primary stores credit for helping.
“Consumers remain highly attentive to grocery prices and are adjusting how they shop to make household budgets work harder,” said Steve Markenson, VP of research and insights at FMI. “Seventy-five percent of grocery shoppers feel they have control over their grocery spending, and 67 percent credit their primary grocery store with helping them stay within budget. Shoppers are comparing prices, planning purchases, using promotions and loyalty programs and turning to private brands to find value.”
The next CPI report, covering August, is scheduled for release Sept. 11.
FMI works with and on behalf of the food industry to advance a safer, healthier and more efficient consumer food supply chain, bringing together members from retailers to producers and industry service providers.