- The consumer price index for food at home fell by 1.6% during the month of July, according to the Bureau of Labor Statistics.
- It was the seventh sequential decline for at-home food prices over the past nine months, following a 1.3% decrease in June.
- Price deflation in the indexes for meats, poultry, fish and eggs; dairy and related products; cereals and bakery products; and nonalcoholic beverages contributed to the at-home food price decline.
While grocery prices continue their slow and steady decline, restaurant food prices tick up, by 0.2% in July and 2.8% over the previous 12 months. The price gap between food bought at grocery stores versus out at restaurants keeps growing, and is now at 440 basis points. That's the widest the gap has been in almost seven years, Deutsche Bank analyst Shane Higgins told Nation's Restaurant News.
Lower prices could drive more traffic to grocery stores, but many consumers will still demand the convenience and RTE nature of foods available at restaurants. Manufacturers are making more prepared food products and making their products more portable and snack-friendly through packaging and formulation changes.
This could be an opportunity for frozen food manufacturers to stage a comeback. General Mills' The Good Table brand recently debuted a line of Freezer to Plate meals that offers better-for-you, gourmet-style meals with less than five minutes of prep time from frozen chicken to the dinner table.
Frozen foods can offer complete meals with several components, like restaurants, without hours of prep time for consumers. Brands like Lean Cuisine and Luvo have worked to overcome assumptions tha processed food is less healthy to better align the category with consumer nutrition demands.