Americans haven't spent this much of their money on food in decades, and relief is not coming anytime soon

Wall Street Journal graph, from Department of Agriculture data

If you feel like your grocery bill is gobbling up more of your paycheck, it's not your imagination. "The last time Americans spent this much of their money on food, George H.W. Bush was in office and "Terminator 2: Judgment Day" was in theaters," report Jesse Newman and Heather Haddon of The Wall Street Journal. "Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show."

Why is this happening, and when will it end? Food costs increased as inflation spiked up prices across the board, but even as other costs ease, food costs will likely keep their post-inflation era price tags. Steve Cahillane, chief executive of snack giant Kellanova, told the Journal, "If you look historically after periods of inflation, there's really no period you could point to where [food] prices go back down. They tend to be sticky."

To lessen pocketbook drain, "Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps," Newman and Haddon write.

Still, many food companies are seeing profits dip based on higher commodity prices for sugar, tomatoes and cocoa and increased labor costs. The Journal reports, "Companies are set to pay more for staffing after 22 states lifted the minimum wage for hourly workers in January." 

One kernel of good news is that some peak prices may come down. Newman and Haddon explain, "Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers."