Remember when food prices were going up at a rate of over 10% a year? Price hikes on food have largely declined the last two years.
In one case, prices are actually going down.
Gary Millerchip, chief financial officer of Costco, said the warehouse chain has been able to lower prices on some of its private label products in recent months. Of course, it should be noted that Costco raised the prices of its basic members from $60 a year to $65.
According to Millerchip, the price of its boneless chicken tenders decreased 13%.
Other examples cited by Millerchip included Kirkland Standard foil reduced from $31.99 to $29.99, macadamia nuts reduced from $18.99 to $13.99, 3 liters of Spanish olive oil reduced from $38.99 to $34.99 and two-pack of baguettes pack reduced from $5.99 to $4.99.
There are a few reasons why Costco has lowered costs. One is that it is using different packaging for some products. Costco recently converted packaging for its laundry packaging from a rigid plastic tub to a pouch. The pouches cost 80% less than plastic tubs, Costco said.
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Although it didn't lower the price of its rotisserie chickens, it did change the packaging to a thin plastic, which upset some customers of the wholesaler.
Costco has also reduced the cost of shipping items.
“By manufacturing these goods closer to the countries in which they're sold, both costs and emissions associated with the shipment of these goods are greatly reduced,” Millerchip said.
Price drops are rare but no unprecedented
Over the last decade, food at home prices have increased an average of 2.7% per year. But there have been a couple years where these prices have declined. In 2016, food prices dropped nationally .4%, according to the Bureau of Labor Statistics.
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In 2009, amid a global recession, U.S. food prices at grocery stores dropped 2.5%.
As of August, food prices are up a mere 0.8% from the previous year, which is a far cry from the over 10% annual hikes felt in 2022, according to government data.
