Don’t expect food prices to go back to pre-pandemic levels

Since the pandemic started in a little over four years ago, it seems like we’ve been paying higher prices for just about everything - including our groceries. Kayla Bruun, Senior economist at Morning Consult, joined TheStreet to discuss if we’ll ever see pre-pandemic prices again, or if this is the new normal.

Related: Inflation isn't the only reason your grocery bill is still too high

FULL VIDEO TRANSCRIPT BELOW:

J.D. Durkin: Kayla, do you think we'll see food prices ever return to pre-pandemic levels, or are we in a new reality where people are sort of accustomed to paying higher than usual prices and therefore that keeps upward pressure on those prices themselves?

Kayla Bruun: For certain categories that are more volatile, things like eggs. You can see big swings up and down. But for grocery prices overall, it would be very, very unlikely for price levels to fall back to where they were. What's more realistic is that we'll continue to see sort of this more moderate, slower inflation pace for food. And we're already starting to see signs in the last few months that consumers are getting more used to these prices. We have an index at Morning Consult that tracks. We call it our price Surprise Index. It's sort of how shocked consumers were by the price tags for some of the things that they were buying. And within the grocery category, that price Surprise Index is way down compared with a year ago. So consumers are starting to adjust. It just might take some time just given how substantial the price increases were. It just it will maybe take a little more time before everything else kind of catches up and it feels more normal.

J.D. Durkin: And what does your data tell you with regards to what consumers are doing in response in order to contend with that time Some higher grocery prices?

Kayla Bruun: Well, we definitely saw some shifts in behaviors. If you're looking back over the past couple of years, when the inflation rate and price prices were rising very quickly. Um, when that was higher in sort of late 20, 22, early 2023, we were seeing a lot of consumers trading down, Uh, looking for cheaper alternatives. The things with groceries is you don't have a lot of flexibility to walk away from those purchases because it's such an essential item. But what you can do is maybe buy a cheaper brand, maybe an in-house brand, or go to a lower cost store. So that was one behavior that we saw a lot of. I will say in the last few months, we've been seeing less of that. And that actually has corresponded with sort of an upward general trend in sentiment. So more recently, it does seem like consumers are feeling a little more comfortable, not feeling like they need to trade down as much. But that absolutely was a tactic that was employed pretty heavily as inflation was a little more elevated.