(NEXSTAR) – Inflation has backed off from the eye-watering double digit numbers after the pandemic, but unfortunately for Americans, grocery store prices haven’t gone down – an especially painful trend for residents of some U.S. cities, according to a new study.
As the cost of a week’s worth of food ticks higher across the country, residents who spend the largest share of their income on groceries also tend to have lower incomes, making them especially vulnerable to rising prices, according to personal finance site WalletHub.
Americans spent an average of 12.9% of their pretax incomes on eating out and at home in 2024, but the share was 33% for the one-fifth of U.S. households with the lowest earnings, according to the U.S. Department of Agriculture.
Prices also can vary substantially by region. In St. Louis, food for home use cost 2% more in June compared to a year earlier; in San Francisco, it was 6%, the consumer price index showed.
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The WalletHub study, published Wednesday, Oct. 7, ranks the top 100 largest cities by the percentage of income residents spend on groceries annually, on average, with Detroit in the top spot.
Groceries in the Motor City take up 4.03% of household income on average, the highest in the nation. While the cost of food is somewhat comparable, with staples like beef, tuna and peaches cheaper than in most stores in the country, Detroit has the lowest median annual household income ($39,938). Nearly a third of residents (32.7%) live below the federal poverty level, according to the U.S. Census Bureau.
“As a result, every dollar that people in Detroit spend on groceries takes up a disproportionately high share of their earnings compared to people in cities with higher incomes,” according to the study.
Despite its cheap whole milk, coffee and peaches, Cleveland ranked second (3.93%) because it also has the second-lowest median household income ($40,801), according to the latest government statistics.
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Rounding out the top 15 are:
Overall RankCityCost of Groceries as a Share of Median Monthly Household Income 1Detroit, MI4.03%2Cleveland, OH3.93%3Birmingham, AL3.45%4Toledo, OH3.2%5Newark, NJ3.15%6Baton Rouge, LA3.11%7Buffalo, NY3.1%8Memphis, TN3.07%9Cincinnati, OH3.05%10Hialeah, FL2.99%11Milwaukee, WI2.95%12New Orleans, LA2.92%13St. Louis, MO2.84%14Winston-Salem, NC2.64%15Miami, FL2.6%(Credit: Wallethub)
How did we get here?
With the average cost of a pound of ground beef nearing $7 – it was under $3.80 in 2019 – many Americans may be wondering how we got here, and what they can do to spend less.
The historic increase happened for numerous reasons. The coronavirus pandemic snarled supply chains and raised labor and transportation costs. Droughts, hurricanes and diseases like bird flu drove down production. Tariffs raised prices on foreign products like coffee, tomatoes and chocolate. Russia’s ongoing war in Ukraine disrupted oil and fertilizer supplies.
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With a fresh conflict in the Middle East accelerating food price inflation again this year, the cost of filling their refrigerators, freezers and pantries has become a frustration for Americans and made affordability a central issue in the fall midterm elections.
“I think the public is coming to grips with, ‘Well, I’m hearing inflation has slowed, but things aren’t getting any cheaper.’ It has to be deflation for prices to go down, and that’s very rare,” said Matt Hamory, who leads the global grocery practice at the consulting company AlixPartners.
Combating higher prices
Groceries are an unavoidable monthly cost for most Americans – so what can people do to lessen inflation’s impact on their bank accounts?
“Shoppers should take advantage of sales and coupons, buy generic items and buy in bulk if possible in order to save money,” Wallethub writer and analyst Chip Lupo recommended. “It’s also a good idea to use a credit card that gives a good amount of rewards on grocery purchases and pay it off in full each month.”
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Experts said there is already evidence that shoppers are changing their habits, with discounters like Costco, Walmart and Aldi gaining market share from some of the country’s major grocery stores like Kroger and Albertsons.
Shoppers are also embracing store brands at supermarkets, drugstores and other retailers, with last year’s sales reaching a record $282.8 billion, according to the Private Label Manufacturers Association.
The Associated Press contributed to this report.
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