A classic Christmas dinner for a small family will cost 16.4% more this year due to ongoing high inflation, according to a new report.
That spike in the average cost of a yuletide feast from $51.75 to $60.29 is twice the 8.2% increase from 2020 to 2021, retail data collector Datasembly said. The research firm averaged prices for 13 foods ranging from turkey to eggnog at Albertsons, Kroger, Target and Walmart.
“This increase is the result of rising prices of several holiday grocery staples including biscuits, butter and russet potatoes, which have increased the most in price, respectively,” Datasembly CEO Ben Reich told The Washington Times.
The report echoes others that have shown grocery prices spiking this holiday season even as gasoline and oil prices drop. Industry insiders attribute the increases to the war in Ukraine, labor shortages and related supply chain bottlenecks.
The cost of food at home rose 12% last month over November 2021, according to the Bureau of Labor Statistics.
The bureau’s latest Consumer Price Index found the cost of dairy rose by 16.4%, bread by 15.7%, ham by 7.8% and turkey by 12%.
Falling oil and gas prices “will take time to recalibrate and work through the system” before grocery shoppers see any relief, said Andy Harig, a vice president at FMI — The Food Industry Association.
“The bottom line is that food prices will likely remain higher than normal in the short term even as inflationary pressures start to ease,” Mr. Harig said in an email.
In a holiday survey released in October, 71% of grocery shoppers told FMI their December plans “will be the same as they were last year,” despite higher prices.
More than one-third of those surveyed said they were buying groceries ahead of time and purchasing different brands to offset rising prices.
“There are still great deals out there for shoppers who plan ahead and are willing to be flexible,” Mr. Harig said, emphasizing private label offerings and seasonal discounts.
Datasembly’s annual report averaged prices for 13 foods: turkey, ham, gravy, stuffing mix, cranberry sauce, russet potatoes, corn, green beans, frozen apple pie, whipped topping, butter, cranberry sauce, eggnog and biscuits.
All of these products rose in price faster than usual this year, the firm found. In two of the sharpest rises, the average cost of homestyle biscuits went up by more than $1 and butter increased from $6.52 to $8.99.
Last month, Walmart responded to grocery inflation by rolling back selected turkey, ham, potatoes, vegetables and dessert products to last year’s prices. The discounts will continue through the day after Christmas.
“Walmart’s purpose of saving people money has never been more important as inflation remains,” Tricia Moriarty, a Walmart spokeswoman, said in an email. “We’re working hard to keep prices low and help families stretch their dollars as we head into the holidays.”
But the Ukrainian war means retailers will have to pass along the cost increases at some point after the holidays, according to economists.
That includes the price of wheat flour, the primary ingredient in biscuits, said Fang Chen, a finance professor at the University of New Haven.
“Prices will likely rise further next year as the war in Ukraine, a major grain exporter, prevents farmers from planting much for the coming year,” Mr. Chen said in an email.
The Department of Agriculture estimated last month that the global supply of wheat stocks will decrease from 1,070 tons in 2021-22 to 1,058 tons in 2022-23.
Economists also expect dairy prices to keep rising since farmers have paid more to buy and maintain cows this year than usual because of rising feed costs and labor shortages.
According to the Department of Agriculture, milk production in January was down 1.4% from the year before. At the start of this year, the 24 leading dairy-producing states had 8.88 million milking cows on farms, down by 63,000 from January 2021.
Rising food prices show no sign of slowing even after the holidays, said Michael Austin, a former chief economic adviser to two Kansas governors.
“Not even Christmas dinner is immune to escaping the price hike onslaught [of] an economy flushed with too much cash and bottlenecked supply chains,” said Mr. Austin, an economist with the National Center for Public Policy Research’s Project 21.