New Groundwork Report Reveals Key Drivers of Grocery Inflation and What Government Can Do About It

February 2, 2024

New Groundwork Report Reveals Key Drivers of Grocery Inflation and What Government Can Do About It

Elizabeth Pancotti, Bharat Ramamurti, and Clara Wilson find a host of causes for rapid price increases, from climate-related supply shocks to expanding corporate profit margins.

Today, Groundwork Collaborative released a new report, “What’s Driving the Rise in Grocery Prices – and What the Government Can Do About It,” that identifies the underlying causes of recent grocery price inflation, including corporate profiteering, supply chain shocks, and climate change.

The report, as featured in The New York Times and Washington Post, offers policy recommendations to reduce the risk of future grocery price spikes, such as investigating the use of slotting fees that require product manufacturers to “pay to stay” on shelves and scrutinizing anti-competitive mergers throughout the food supply chain.

“Surveys show that grocery prices remain a top concern for American families, even as price increases have slowed in the last year,” said Bharat Ramamurti, former Deputy Director of the National Economic Council and co-author of the report. “While the Biden administration has already taken important steps to offset the financial impact of grocery price increases on millions of lower-income families, more work remains to be done to reduce the chances of future grocery price spikes. ”

“Corporations continue to keep grocery prices high as supply chain snarls loosen, prolonging the squeeze American families feel at the checkout line,” said Elizabeth Pancotti, strategic advisor for Groundwork and a co-author of the report. “As long as these companies can use the next crisis as an excuse to hike prices, food affordability will remain a top concern.”

Among the report’s key findings:

The report notes how the Biden administration has mitigated the harms of high food prices for the more than 40 million Americans who receive SNAP benefits. Due to the administration’s reforms and cost-of-living adjustments, average per-person SNAP benefits have increased by 64 percent since 2019 – from $129 to $212 – significantly outpacing grocery inflation for most families.

The Biden administration is also tackling the other underlying drivers of grocery inflation by increasing competition between meat processors, investing in domestic food supply chains, and tackling climate change through the Inflation Reduction Act.

The report offers additional policy recommendations, including:

Read the full report here and email to speak to the report’s authors about their findings.