CPI data shows food prices continue to rise for American consumers
Yahoo Finance reporter Allie Canal breaks down the latest food index data, which grocery items are being particularly hit by inflation, and how it's affected coffee shops like Dunkin' and Starbucks.
Video Transcript
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RACHELLE AKUFFO: Inflation at a new 40-year high, rising 9.1% in June. Now one of the biggest contributors, the cost of food. The food indices both at home and away from home rose 1% in June. "Yahoo Finance's" Alexandra Canal joins us now with more. Allie, obviously this is tough. Food is close to home for everybody.
ALEXANDRA CANAL: That's right, Rachelle. And it really is disappointing to consumers. The food category continuing to see those price increases, up 1% over the month, but a whopping 10.4% on an annual basis, which is the biggest 12-month increase since the period ending February 1981. So prices just continuing to skyrocket and reach new record highs.
If we look specifically at grocery store items, you'll see that the prices of cereal, bread, chicken, all seeing increases on a month-over-month basis. But we did have some positive news with bacon prices falling for the second straight month in a row, in addition to prices declining for beef and veal. So meat lovers can find a bit of solace in that, but year-over-year really across the board, we're seeing double digit price increases for a lot of those basic food items that I just mentioned.
Eggs, for example, that's up a whopping 33% compared to June 2021. So just another month of hotter than expected inflation data and certainly discouraging to consumers.
- Boy, that is a massive number, Allie. Inflation also seems to be hitting consumers' coffee addiction. Visits to Starbucks and Dunkin' are down for the month of June. Is that right?
ALEXANDRA CANAL: That's right. And as a coffee enthusiast myself, it pains me to say that consumers are shying away from their daily cup of Joe, at least at these big coffee giants. According to foot traffic analytics platform, Placer.ai, coffee visits dropped below quick service restaurants for the first time all year during the month of June. Now this is due to a combination of factors, like inflation, high gas prices, the rise of COVID cases.
But what's interesting here is that throughout the pandemic, coffees actually outpaced other dining categories. Consumers really were flocking to their favorite chains despite the pandemic, despite rising prices. But June just delivered that blow to that pricing power. Monthly visits to Starbucks were down nearly 8% year-over-year. Dunkin' also down nearly 5% on a year-over-year basis.
But pre-pandemic foot traffic levels, Dunkin' is relatively on par to where they were in 2019. Starbucks not really there. Still off about 7%. That could be too Dunkin' being a little bit more affordable when it comes to coffee compared to Starbucks, which we know is important to those value conscious consumers.
But the report did say that both chains visit gaps are relatively small overall and that customers could just be temporarily adjusting their behaviors to match the current economic downturn. But over the long-term, the expectation is that these foot traffic levels will bounce back to normal.
- I got to tell you, I am driving less, but not drinking any less coffee. Allie Canal, thanks so much. Great stuff.
