FMI Releases Resources on COVID-19 Pandemic Impact on Grocery Prices

FMI-The Food Industry Association releases a web experience that explains how the COVID-19 pandemic has affected grocery prices more than nearly any other category of consumer spending.

In April, the Consumer Price Index for food-at-home posted its largest monthly increase since February 1974, and grocery prices are up 5.6% for the period June 2019 to June 2020.

“The food industry is sensitive to the fact that American consumers remain highly concerned about COVID-19 and food sourcing but appear to be acquiring more confidence,” shared Leslie G. Sarasin, president and CEO of FMI. “This web experience is designed to educate the public, so grocery shoppers better understand how food prices are determined and how the COVID-19 shock to the supply chain affected grocery prices.”

USDA’s Economic Research Service tracking of Food At Home (FAH) and Food Away From Home (FAFH) spending shows how approximately $23 billion in consumer spending was redirected toward grocery stores as restaurants were forced to closed due to COVID-19. (Graphic: Business Wire)

The website,, is based on insights from The Fundamentals of Food Prices: Costs, Consumer Demand and COVID-19 prepared for FMI by Ricky Volpe, Ph.D., associate professor for Cal Poly in San Luis Obispo, CA.

Related Article: 5 Experts Talk About The Future of Hispanic Retail: Moving Beyond COVID-19

The report finds the COVID-19 pandemic caused four major changes that impacted grocery prices in a short period of time:

  • A rapid shift to eating at home.
  • The loss of foodservice demand.
  • An increase in production and processing costs.
  • An increase in operating costs for grocery stores.
The food dollar developed by the USDA Economic Research Service demonstrates how each part of the food supply chain contributes a portion to the food dollar. (Graphic: Business Wire)

Sarasin shared about grocery prices study, “Our research indicates there will continue to be a higher level of retail-sector food spending for the foreseeable future as home cooking displaces spending on foodservice. However, grocery shoppers can rest assured that cost increases are not related to increased profits, and instead result from a spike in expenses due to labor, lower capacity production, cleaning and sanitation protocols, and even transportation demands.”

The web experience and report are accompanied by a webinar series for the food industry to dive deeper into understanding the economics of grocery prices.

Resources are also available to help shoppers who face food insecurity to connect to federal assistance programs including the Supplemental Nutrition Assistance Program (SNAP) and the WIC program, FMI said.