Fri 23 Jan 2009
Deflation Hits Grocery Store
Posted by RichSlick under Basket of Goods
[8] Comments
I went shopping today and thought it was time enough to update my “Basket of Goods” category since it’s been a while since I measured inflation. I like to measure my own inflation because I don’t trust any BLS report that comes from the government. All sorts of hedonic adjustments and other crap are factored into government reports. I like to get down to the brass tacks and get my own information for my own neighborhood and here’s what I found:
Deflation Grocery 2009
| Item | Sep 07 | Apr 08 | Jan 09 | %Change |
|---|---|---|---|---|
| 1 Dozen Eggs | $2.09 | $2.39 | $2.39 | 0% |
| 1 Gal Org. Milk | $5.99 | $5.99 | $5.99 | 0% |
| 16 / 14.5 oz Box Cereal | $2.39 | $2.47 | $1.98 | -24.7% |
| 1 Loaf Bread | $2.19 | $2.48 | $2.44 | -1.63% |
| 12 oz Bacon | $2.68 | $1.88 | $1.49 | -26% |
| Rib Eye Steak | $7.87/lb | $8.48/lb | $8.49/lb | 0.1% |
| 2.5 Gal Water | $2.69 | $2.69 | $2.50 | -0.8% |
I actually didn’t believe the numbers when I was putting them together.  I hope I didn’t do the math wrong on the calculations. I tend to screw up simple math but can handle complex equations rather easily; I haven’t been able to figure out that one.
The price of cereal dropped a whopping 24% and this was the biggest shocker for me.  My kids LOVE cereal and I clearly recall cereal costing $4 or $5 a box last year but when I went shopping most cereals were selling for $2 or less. The size remained stable at 14.5 oz too, no shrinkage! It didn’t appear to be a “sale” price either as I didn’t see any sale tags; I think that’s they everyday price right now.
The second shocker was bacon.  A 12 oz package of bacon dropped down to $1.49 or 26% from the last time I checked the price.   I try to be consistent and buy the same brands but the brand I was previously buying was no longer sold at the store so I switched to another brand.  There were several brands selling for $2/5 but the everyday price was $1.49.
There were slight decreases in the cost of bottled water and a loaf of bread (same size as last time).  The only increase was the cost of beef rib eye steaks. The cost actually went up a penny so I wonder if the beef industry or the grocer is hosing the consumer.  If cereal grains are down then why isn’t beef?
I’ll try to do this quarterly from now on as was my original plan but there is no doubt that deflation has hit the grocery store.
8 Responses to “ Deflation Hits Grocery Store ”
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[…] Slick at Get Rich Slick has a post, Deflation Hits Grocery Store that I read last week, showing periodic prices of staple items, and comparing them. I decided […]
I’m new to your site so I’m not sure if you account for this:
Are you including the grocery store shrink ray in your calcs for bread? This is the thing where they slightly reduce the packaging, and thus the amount of food you’re getting while keeping the price the same.
I see the 16 oz cereal and others would be difficult to game because their sizes are listed. So I’m only asking about the bread.
Other than that this is very cool. Unless of course you think of deflation as the precursor to depression. Then it’s not so cool.
Yes,
I do adjust for sizes. The sizes have remained the same from the last time I checked the prices.
We are in a deflationary period. Cars, houses, food and energy are all dropping in prices.
Do you buy a premium brand of bread (or deli bread) or is the cost of living difference really that much? I have been getting a loaf of store brand sandwich bread for 89 cents recently. It has been billed a sale price, but I have seen it every time I have shopped in the last 6 weeks at least, so it is a pretty much constant sale if so.
I am glad we are in a definitive deflationary period now. It gives me less to challenge you on in the comments, but I was tired of all the INFLATION IS AT 12% NO MATTER WHAT THE GOVERNMENT TELLS YOU!!! posts. 🙂
Brandon,
A year ago, inflation was really high. When you factor in prices increases and portion shrinkage it was getting out of control but now we are in the exact opposite as prices deflate. Maybe sizes and portions will go up to mask the real deflationary rate.
Wow, I’m stuck on the fact that you pay $5.99 for a gallon of milk. It’s $3 at our name brand store and $1.99 at Aldi here in Illinois.
I like this idea, though, and I think I’m going to start tracking our prices, also.
Dennis,
I buy organic milk instead of hormone and chemically altered water that goes by the name of “milk” lately.
Personally, I’ve seen a dramatic change in my kids learning ability since we’ve made the switch a few years ago.