Coronavirus drives sharp rise in food prices at grocery stores in April

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Friday, May 15, 2020
Grocery store prices rise sharply in April due to coronavirus
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It's not just your imagination: the cost of shopping for groceries rose sharply nationwide in April.

CHICAGO (WLS) -- What many consumers no doubt already suspected was confirmed by the U.S. Department of Labor Wednesday, when it revealed that grocery store prices rose dramatically in April.

Prices recorded their highest ever month-to-month increase in nearly 50 years, while nationwide levels of unemployment also climbed toward historic peaks.

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"The last time the U.S. has seen food prices increase so dramatically was in 1973, early 1974," said Professor Philip Braun of Northwestern University.

Nationwide, shoppers paid 2.6% more money at the checkout line. In Chicago, prices rose 5.8% compared to a year ago. Dairy products rose 9.5% compared to 2019, while prices for meat, poultry, fish and eggs rose 4.7%.

Economists agree the increase comes from the combination of more demand as people spend more of their time at home, and problems in the supply chain.

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"Beef, for example, some of the slaughterhouses, the packing plants have closed down because of COVID concerns," said Gus Faucher of PNC Financial Services Group. "Or we've seen increased demand for ground beef, so that's raised prices as well. So it's a combination of both supply and demand issues."

The increase may be short-lived; some described this as a period of transition.

"Prices are goingto be going up, going down, sideways and then they will ultimately stabilize at a different point once the economy has adapted to this pandemic," Braun said.

Ultimately, economists point to a drop in prices in nearly everything else, including oil prices, an offset to the pain that shoppers may be feeling at the grocery store.