U.S. grocery prices declined slightly in September, providing some relief to consumers even as a sharp increase in energy costs raised concerns about renewed inflationary pressure on the food supply chain.
The food-at-home index fell 0.1% in September and increased 1.8% over the preceding 12 months, according to the Consumer Price Index report released October 14 by the U.S. Bureau of Labor Statistics (BLS). The monthly decline followed an unchanged reading in August.
Overall consumer prices rose 0.6% in September, accelerating from a 0.4% increase in August. The annual inflation rate reached 3.7%, up from 3.4% the previous month.
The divergence between grocery prices and broader inflation reflects easing costs in several major food categories, particularly meat and dairy, even as rising fuel prices threaten to increase transportation and distribution expenses.
Beef and Dairy Lead Grocery Price Declines
Three of the six major grocery food categories recorded price decreases in September, while the other three increased.
The meats, poultry, fish and eggs index declined 0.5%, including a 1.0% decrease in beef prices. Dairy and related products fell 0.9%, led by a 2.0% decline in milk prices. The index for other food at home decreased 0.2%.
Price increases were concentrated in beverages and produce. Nonalcoholic beverages rose 0.9%, including a 1.5% increase in carbonated drinks. Fruits and vegetables increased 0.5%, while cereals and bakery products edged up 0.1%.
Several individual categories continued to experience significant annual price increases despite the broader moderation in grocery inflation. Apple prices were 7.5% higher than a year earlier, tomatoes were up 6.8%, and coffee increased 7.1%.
Conversely, egg prices were 20.6% below their September 2025 level, while butter prices declined 10.3% over the same period.
The overall food index, which includes restaurant meals, was unchanged in September and increased 2.5% over the year.
Grocery Inflation Remains Below Restaurant Inflation
Food-away-from-home prices increased 0.2% in September and 3.5% over the preceding 12 months, nearly twice the annual increase recorded for groceries.
Full-service restaurant prices rose 3.8% year over year, while limited-service meals increased 3.2%.
The continuing gap suggests that preparing meals at home remains comparatively attractive for consumers seeking to manage household food spending, although grocery prices remain higher than a year earlier.
FMI Warns of Diesel and Weather Risks
FMI – The Food Industry Association welcomed the latest grocery inflation figures but cautioned that higher transportation costs and potential weather disruptions could reverse some of the recent relief.
“September’s CPI report should once again be welcome news for grocery shoppers, as food-at-home prices declined slightly for the month of September,” said Andy Harig, FMI vice president of tax, trade, sustainability and policy development. “In particular, key staples like beef and dairy saw notable declines.”
Harig warned that elevated diesel prices associated with the ongoing conflict in Iran are beginning to affect the grocery supply chain, potentially increasing costs in the months ahead.
The BLS report underscored the broader energy pressures. Gasoline prices increased 9.1% in September and were 34.2% higher than a year earlier. The overall energy index rose 5.2% for the month and 20.4% annually.
FMI also identified the developing Super El Niño event as a potential threat to agricultural production, transportation networks and global commodity supplies.
“We are also monitoring the developing Super El Niño event, which could disrupt growing conditions, transportation networks and global commodity supplies,” Harig said.
The association said retailers would continue working to control costs, maintain supplies and deliver value to consumers.
For supermarket operators, the September figures offer a mixed outlook: easing prices in several major food categories provide near-term relief, but escalating energy costs and potential supply disruptions could complicate efforts to maintain that momentum through the remainder of the year.