Why Are Groceries So Expensive?

If you’re asking yourself why groceries are so expensive, you’re not alone. Food prices rose over 25% in five years, and how to budget for groceries gets a lot harder when your money only goes 75% as far as it used to. We’re here to break down why your average grocery cost per month has gone up, which grocery items have increased the most in price and how to save money on groceries with Fetch. 

Fetch makes it easy to save money on groceries each month: open the Fetch app to choose products and retailers with offers on them, find brands with boosted point values or do your shopping right in the app with Fetch Shop. 

Factors contributing to rising grocery prices

You’ve likely heard of inflation; costs do go up naturally over time. But inflation typically works slowly, and most people only notice these differences compared to a previous decade or generation.

Groceries are so expensive now in part because inflation has been amplified by:

• Supply chain issues
• Increased transportation costs
• Labor shortages
• Global market dynamics

There have also been some specific events that have impacted grocery prices:

• The avian flu outbreak in 2022 impacted egg and chicken prices and is only now settling down some.
• Some corporations saw the 2020 pandemic as an opportunity to increase profits and have only recently started lowering prices to better reflect supply and demand.
• The war in Ukraine might not seem like it should impact your grocery bill, but they’re one of the leading producers of corn and wheat in the world (5-10% of each).

We also may soon see tariffs impacting groceries that come from other parts of the world.

Shrinkflation is real, too

Why are groceries so expensive? Shrinkflation. It’s a newly-coined term that means you’re paying the same price for a product but getting less of it. 

• This might mean that your bag of chips is still $3.99 and still the same size bag, but it has fewer chips in it. 
• Or a box of cake mix might still have the same size box and same recipe but include only 90% of the mix it used to have.

Which grocery items have increased the most in price?

We already pointed out how eggs jumped up in price in response to the avian flu of 2022, but quite a few different products have seen a notable price increase. Here are the 10 groceries that have increased the most in price since March 2020 (from the U.S. Bureau of Labor Statistics):

• Eggs: +50%
• Beef roasts: +40%
• Flour: +35%
• Sugar: +34%
• Beef steaks: +32%
• Carbonated drinks: +31%
• Canned produce: +31%
• Salad dressing: +31%
• Biscuits and rolls: +31%
• Butter and margarine:+29%

It can be difficult to point to just one reason why groceries are so expensive. Bringing beef to your table means 

• Feeding the cow, which is likely impacted by any grain shortages and price increases.
• Paying the workers, who also have higher grocery expenses to worry about.
• Packaging and storing the beef, impacted by increased materials costs.
• Shipping the beef, impacted by increased fuel costs.

Now ask yourself how many products you buy at the store have similar production needs, and it’s pretty easy to see why groceries have gotten more expensive.

Average grocery cost per month

The USDA has 4 different monthly budgets they recommend for a family of four:

• Thrifty: $975, up 50% from $650 in 2020
• Low: $1,050, up 25% from $850 in 2020
• Moderate: $1,300, up 25% from $1,050 in 2020
• Liberal: $1,580, up 20% from $1,300 in 2020

What affects the average grocery cost?

Household size is just one factor that can affect your average grocery cost per month.

Location can have a huge impact on these numbers. Alaska and Hawaii, for example, have much greater grocery costs due to how remote they are. Midwestern states like Wisconsin and Iowa, however, tend to have some of the lowest average grocery cost per month.

Dietary preferences might mean you don’t need beef but have an increased need for cheese or eggs, but in most cases it evens out in the end. If you prefer to eat exclusively organic foods, though, you should expect a consistently higher price tag.

If you live in a food desert, you might find yourself doing grocery shopping at places that aren’t really grocery stores. You’ll usually be shopping for older foods at higher prices if it’s from a gas station or dollar store.

How to budget for groceries

Budgeting for groceries will vary based on how many people are in your household, but there are some tips that work for everyone:

• Plan meals in advance. Make your grocery list based on the recipes you’re planning, and plan your meals to use up leftover meat or produce. 
• Create a grocery list. If you wander into a grocery store without a list, at the very least open the Fetch app and choose from the available offers. Bringing a list means you buy what you need.
• Stick to your list. Bringing a list with you is just part of the solution; you need to stick to it, too! If your budget is tight, you should get into the habit of buying only what’s on the list (and don’t shop hungry).
• Use data. It’s okay not to have a super strict budget at first. Instead, track your spending for a month or two (easy to do when you snap your receipts in the Fetch app) and decide if your normal shopping can work with your income.
• Use gift cards for your groceries. Using the Fetch app earns points you can redeem for gift cards. A $25 or $50 grocery store gift card expands your budget.

Looking to learn more about how to budget for groceries? Check out our guides on grocery shopping for one, two or four people.

Ways to save money on groceries

Most of the ways to save money on groceries are the same ones your parents and grandparents used. It’s because they work. These include:

• Shop sales, clip coupons. Just like you should check the Fetch app for offers and boosted brands, you should check your grocery store’s weekly ad for sales and coupons.
• Buy in bulk. If you have a large family or are buying something shelf stable like dry beans or flour, buying in bulk means spending less overall for your food.
• Store brands are your friend. Most of us have favorite name brands, but store brands are often the same food in a different package (and a lower price). Buy the name brands when there’s a sale or when it’s one you need, but try store brands to start saving.
• Use Fetch. Turning your Fetch points into grocery gift cards can give you some extra wiggle room in the grocery budget each month. Keep reading for our tips on how to maximize your Fetch benefits.
• All of the above. You can combine any or all of these tips together. Buy generic brands in bulk when they are on sale, and remember to snap your receipt in the Fetch app.

These are just five ways to save money on groceries. See if family or friends have other tips; you never know what secret savings hacks people have until you ask.

How Fetch can help you save money on groceries

First, the Fetch app is easy to use:

1. Take out your grocery receipt. 
2. Open the app. 
3. Press the camera icon at the bottom of your screen.
4. Snap your receipt.
5. Earn points.
6. Redeem points for gift cards.

You’ll get points for every receipt you snap, but there are ways to earn more points on your purchases: 

• Fetch Offers are personalized to you and earn you extra points based on buying specific products or shopping at specific locations. (Hint: check the offers first, then look at the weekly ad for your grocery store).
• Boosted brands earn you more points for trying specific brands. You’ll see a little flame icon in the app, and the bigger the flame, the bigger the boost in points.
• Shop in the app. Tap the little shopping cart next to your camera in the Fetch app to open Fetch Shop. You can buy groceries (and pretty much anything else) in there, and you’ll earn points on the dollar with no need to snap your receipts.

Check your personalized offers in the Fetch app now

The offers in your Fetch app are personalized to you, and shopping them is one of the best ways to save money on groceries, as each one brings you closer to a free gift card. Choose the products, brands and retailers that earn you the most points to see the most rewards. 

Now that you know how to budget for groceries, reward yourself using Fetch. You can put your points toward any gift card, but if you’re feeling your grocery budget getting tighter, we suggest cashing those points in toward a gift card to your favorite grocery store.