Last week, Groundwork Collaborative released a new report, “What’s Driving the Rise in Grocery Prices – and What the Government Can Do About It,” that identifies a host of causes for rapid grocery price increases, from supply shocks to expanding corporate profit margins.
As covered by The New York Times and Washington Post, this new report finds that families are now paying 25 percent more for groceries than they were before the pandemic, outpacing overall inflation. The report offers policy recommendations to address the high cost of groceries and reduce the risk of future price spikes, building on the steps the Biden administration has already taken to offset these price increases.
The report highlights that the Biden administration’s reforms to SNAP have raised average per-person SNAP benefits by 64 percent since 2019 – outpacing grocery inflation for most families. These reforms and cost adjustments have helped mitigate high food prices for the more than 40 million Americans who receive SNAP.
This latest report – authored by Bharat Ramamurti, Elizabeth Pancotti, and Clara Wilson – builds on Groundwork’s previous report, which finds corporations have driven more than half of the inflation we’ve seen since input costs have come down.
“While prices overall have risen by 19 percent in the last three years, families are now paying 25 percent more for groceries than they were before the pandemic.”
“In 2022, consumers in the bottom quintile of the income spectrum spent 25 percent of their income on groceries, while those in the highest quintile spent under 3.5 percent. And roughly the bottom 40 percent of consumers spend more than 10 percent of their income on groceries.”
“The overall rise in SNAP benefits between 2019 and 2023 has outpaced the rise in grocery costs for many beneficiaries…On average, the typical family that relies on SNAP has seen their benefits increase in the Biden administration at a significantly faster rate than grocery prices have risen.”
“While the rise in grocery prices has been fairly broad-based in recent years, we find that five categories drove nearly 30 percent of grocery inflation: beef and veal; poultry; non-frozen non-carbonated juices and drinks; fresh fruits and vegetables; and snacks.”
“Although supply chain issues and increased production costs have played a role in rising grocery prices, certain manufacturing and retail corporations have also taken advantage of the recent global inflation surge to raise their profit margins. These trends are most notable in more concentrated industries.”
“Congress should expand SNAP to provide the benefits it was providing temporarily during the pandemic to ensure more families’ full food needs are met.”