Why the Grocery Store Still Feels So Expensive — Even as Inflation Slows

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Grocery prices rose 0.3% in May, according to the latest Consumer Price Index, with increases seen in categories like cereal, frozen foods, snacks, and fresh fruit — despite overall inflation remaining relatively stable.
Egg prices fell 2.7% in May, providing a rare break after months of volatility caused by avian flu outbreaks, although they still stay above pre-pandemic levels.
Spending habits are diverging by income, with higher-income households increasing discretionary spending while middle- and lower-income groups are cutting back — reflected in shifts toward store brands, discount retailers, and more strategic meal planning.

After a brief pause in April, grocery prices are on the rise again. According to the May Consumer Price Index (CPI) released Wednesday, food at home rose 0.3% in May, signaling that while overall inflation may be slowing, the grocery aisle is still seeing steady price pressure. Although overall inflation is easing, food remains a pressure point — especially for households managing tight grocery budgets.

The grocery category tends to feel more personal than others, partly because it’s a recurring cost that’s harder to avoid. In other words, shoppers might notice falling gas prices, but spending a few extra dollars on cereal or produce each week adds up quickly. That tension is reflected in consumer behavior, with many households rethinking not just what they buy but how, where, and how often they shop.

Not everything went up: egg prices fell by 2.7%, a welcome shift after months of volatility caused by avian flu outbreaks and supply chain issues. May’s drop signifies a rare pause in what has been one of the most volatile grocery categories since early 2023. Prices shot up due to widespread outbreaks of highly pathogenic avian influenza (HPAI), and although wholesale costs have since declined, consumer prices have lagged behind. Even with this month’s drop, eggs remain significantly more expensive than pre-pandemic norms.

After months of avian flu chaos, May brought a 2.7% price dip for eggs. But volatility remains, and long-term costs haven’t fully corrected. For shoppers, the temporary break is more symbolic than substantial.

Tom Werner / Getty Images

Beyond eggs, the situation is more mixed. Cereal and bakery goods experienced the largest increase — up 1.1% in May — while frozen prepared foods grew by 0.6%. Nonalcoholic beverages and snacks also saw modest rises, and fresh fruit increased slightly by 0.3%. Produce prices tend to fluctuate with the seasons, and although summer can bring more promotional pricing, lingering transportation costs continue to influence sticker prices on everything from strawberries to salad greens.

Dining out isn’t much better. Food away from home rose 0.3% month-over-month and is now 3.8% higher than last year, driven by rising labor costs, commercial rent, and menu price adjustments. For many households, higher expenses at grocery stores and restaurants have led to more meal planning at home — not necessarily for culinary reasons, but for financial ones.

Quick and easy tips to save on grocery spending this summer

Use unit prices to compare value across sizes and brands.
Shop produce that’s in season—like berries, corn, and zucchini.
Freeze leftovers or bulk items to reduce food waste.
Try store brands — many are identical to name brands at lower prices.
Plan meals around what’s already in your pantry or freezer.

Spending habits are also diverging sharply across income levels. According to Morning Consult’s May 2025 U.S. Consumer Spending Tracker, overall consumer spending dipped 0.5% in May after adjusting for inflation and seasonality. Higher-income households (earning $100,000 or more) increased their discretionary spending by 6.1%, but middle-income households cut back by 5%, and lower-income households also pulled back slightly. That dynamic is playing out in grocery aisles, where shoppers are leaning more on store brands, discount retailers, and meal planning to stretch their budgets.

Meanwhile, falling energy prices — down 1% overall and 2.6% at the pump — helped keep broader inflation in check. Headline CPI increased just 0.1% for the month, with core inflation (excluding food and energy) ticking up 0.1% as well.

The next inflation report, covering June, will be released in mid-July — just as summer produce season peaks and back-to-school shopping kicks off. Factors like tariffs, transportation costs, and even weather disruptions could all shape pricing in the months ahead. But for now, May’s CPI signals that while overall inflation seems to be stabilizing, the food aisle is still very much in flux.

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