Why Grocery Prices Keep Rising and How to Shop Smarter

The cost of living has been increasing with each passing year. One of the top contributors is the rising grocery prices. Although the inflation rate has slowed down, food prices remain high, leaving many consumers with a stretched-out budget.

This article will help you understand why prices are climbing and equip you with actionable grocery hacks.

Key Insights

• The USDA predicts a grocery price inflation of 2.5% in 2025. While this rate is historically low, consumers will continue to feel the pinch of high food prices.
• The price of certain food items remains volatile and is expected to rise significantly in 2025. For instance, according to the USDA’s Economic Research Service, the price of eggs is expected to rise by 41% in 2025.
• Budgeting, price comparisons, buying in bulk, and leveraging discounts can help consumers navigate rising grocery prices.

Why Are Food Prices Rising?

The main factors contributing to food price increases in 2025 include inflation, supply chain disruptions, and increasing demand for food products. Below is a closer look at these and other key contributing factors.

Inflation and rising production costs

Simply put, inflation is the rate at which the general price of goods and services increases over time. Consequently, it reduces the purchasing power of money, which has become a topic for discussions and TikTok videos.

Source: tiktok.com

The average annual inflation rate has been declining steadily since its peak of 8% in 2022. In 2024, it was at 2.9%, and in the first two months of 2025, it remained relatively low at 3.0%. 

However, the price of food commodities has remained the same, leaving many consumers frustrated. So, why haven’t food prices decreased despite the decline in the inflation rate? 

A phenomenon known as sticky prices is to blame. It is when companies resist lowering the price of commodities, even though inflation rates have reduced, to maximize their profit margins.

Shrinkflation

Shrinkflation is a pricing strategy where companies reduce the size, quantity, or weight of a product but keep the price the same. Most companies assume that this strategy is subtle, and consumers will hardly notice.

However, according to the consumer trends report, shrinkflation was among the top complaints. Consumers are often disappointed when they find out that a company has reduced the quantity of a product but kept the price the same.

For example, in a Ritz Crackers review #6090593, a customer expressed their disappointment, saying:

I want what I pay for! The same as you! Cost is one thing, downsizing and raising cost is cheating your customers!

Higher demand for certain foods

The law of supply and demand controls the market equilibrium and prices. When the demand for products is higher than the supply, prices go up. This was evidenced during the COVID-19 pandemic, when there was a surge in demand for essential groceries, and the prices went up.

More recently, the Avian flu outbreak caused a shortage of eggs, resulting in their prices skyrocketing. One YouTube creator made a video highlighting the long queues at Costco on a Monday morning as hundreds of people went in to get eggs. The price of eggs was much higher than usual, and each person was limited to 3 trays only. 

Extreme weather and climate change

Another factor that can cause an increase in food prices is extreme weather and climate change. Extreme weather conditions severely impact agriculture and disrupt supply chains, causing food shortages.

For example, the Los Angeles fires witnessed this January affected agriculture in many ways. They damaged crops and led to the closure of various farmers’ markets. In addition, strong winds and power outages further strained agricultural operations. 

Other supply chain disruptions

Supply chain disruptions cause delays and shortages, driving up the cost of food. A notable example is the 2021 Suez Canal Obstruction. A container ship blocked one of the world’s busiest trade routes for six days, delaying food shipments.

We also experienced supply chain disruptions during the COVID-19 pandemic. Due to the lockdown, truck drivers could not deliver food items across the country.

These unexpected issues and trade disputes can further cause supply chain disruptions, causing a surge in price.

7 Money-Saving Grocery Hacks

If you are wondering how to buy groceries on a budget, below are 7 money-saving grocery shopping tips.

Plan and budget your grocery shopping

One of the most effective ways to save money on groceries despite the rising prices is to plan your meals and create a budget. It can help you to avoid impulse purchases. 

Start by monitoring your weekly and monthly grocery usage, taking note of the must-haves and items that you buy and hardly use. With this information, come up with a weekly meal plan that suits your nutritional needs and preferences. Then, write down the ingredients and quantities for each meal and add them to your grocery list. 

Maximize what you buy

According to the USDA, food waste is estimated at 30-40% of the food supply. It’s counterproductive to do your best to find deals if the food ends up in the garbage bin in your home. You want to make the most of what you buy. Practices such as meal prepping, proper food storage, and repurposing leftovers can help cut grocery costs. 

Pay attention to the product size

With the increasing incidents of shrinkflation, you want to pay attention to the product size, weight, and volume. Don’t just buy the bigger pack because you assume it has more units at a lower price. Sometimes, companies sneakily charge more for bigger packages, yet it would be cheaper to buy multiple smaller packages of the same item.

Take advantage of sales and discounts

Another way of saving money on groceries is to take advantage of sales and discounts. Store apps and discount apps to help you find money saving deals. For example, Kroger, Safeway, Walmart, Flipp, Ibotta, Rakuten, Couponso.com, and Honey, among others.

Also, consider signing up for loyalty programs for stores you frequent. These programs offer you access to digital coupons, personalized discounts, and cashback rewards. You also get points that you can use for future purchases.

Compare prices between stores

It is common for different stores to have different prices for the same items. Use apps such as ShopSavvy, Basket, and Flipp for comparison shopping across multiple stores in real-time. 

To shop online safely, compare prices between Amazon Fresh, Walmart, and Target, among others, before making your order.

Buy seasonal and store-brand products

One of the easiest ways to save money on groceries without sacrificing quality is to buy seasonal produce or store-brand products. When in season, there is a high supply of specific fruits and vegetables, thus resulting in lower prices.

On the other hand, store brands or private label brands typically cost less than their equivalent name brands, yet they have a similar quality. Customer reviews indicate that, in some cases, store brands have better quality than name brands.

 For example, in a Thomas Breads review, the customer said:

… Once considered the gold standard, they have now been reduced to nothing more than garbage. Im trying different no-name store brands which I find are much better than Thomas and much cheaper…

Shop at discount and bulk stores

Shopping at discount grocery stores, warehouse clubs, and farmers’ markets can significantly reduce your grocery bill. Discount grocery stores and warehouse clubs are great options for buying non-perishable or long-shelf items like pasta, rice, frozen foods, and canned foods. While at farmers markets, you get fresh seasonal produce at affordable prices.

Becoming a Smart Consumer When Grocery Shopping

Wondering how to lower your grocery bill? Unfortunately, food costs will most likely continue to increase. However, with the grocery hacks discussed above, you will be able to budget, plan your meals, and get the most out of the items you buy.

Have insights about grocery shopping or, maybe, have a great shrinkflation example? Why don't share your consumer issue in an online review?