Food-at-home inflation rebounds after September’s decline, with beef, produce and dairy prices rising as higher energy costs continue to affect the grocery supply chain.
U.S. grocery prices rose 0.4% in October, reversing a modest September decline as higher costs for meat, produce and dairy contributed to renewed food inflation, according to Consumer Price Index (CPI) data released Tuesday by the U.S. Bureau of Labor Statistics (BLS).
The increase followed a 0.1% decline in September and no change in August, ending two months of relatively stable supermarket prices. The overall food index, which includes groceries and restaurant meals, increased 0.5% in October after remaining unchanged the previous month.
FMI – The Food Industry Association said the latest figures reflect the growing impact of higher energy and transportation costs throughout the food supply chain, with additional pricing pressures possible in the months ahead.
“October’s CPI report shows that food prices rose as the pass-through of higher recent energy costs continues to work its way through the grocery supply chain,” said Andy Harig, FMI vice president of tax, trade, sustainability and policy development.
Beef, Produce and Dairy Lead Grocery Price Increases
Four of the six major grocery food categories recorded price increases in October, according to BLS data.
The meats, poultry, fish and eggs index rose 0.5%, including a 0.9% increase in beef prices. Fruits and vegetables increased 0.6%, while dairy and related products also rose 0.6%.
Prices for other food-at-home products increased 0.7%, driven partly by a 1% increase in snack prices.
Not all grocery categories became more expensive. Nonalcoholic beverage prices declined 0.3%, while cereals and bakery products were unchanged.
The October increases contrasted with September, when beef prices declined 1%, dairy prices fell 0.9% and the overall meats, poultry, fish and eggs category decreased 0.5%.
Restaurant prices also accelerated in October. The food-away-from-home index increased 0.5%, including a 0.7% rise in full-service restaurant prices and a 0.4% increase for limited-service meals.
Energy Costs Continue to Pressure Food Supply Chain
FMI attributed much of the renewed pressure on grocery prices to higher energy costs, particularly diesel fuel, which affects agricultural production, food processing, refrigeration and distribution.
“Energy is a critical input at every stage of the food system, from powering farm equipment to processing, packaging and transporting products to store shelves,” Harig said.
“When fuel and diesel costs rise, those higher costs are ultimately reflected in what it takes to produce and deliver food, and it can take months for them to show up in grocery prices, which we are now witnessing.”
The BLS reported that overall energy prices increased 0.7% in October following a much larger 5.2% increase in September. Gasoline prices rose 1% in October after climbing 9.1% the previous month, while electricity prices increased 0.9%.
The lag between rising transportation costs and retail food prices is particularly important for supermarkets, which must manage higher operating expenses while remaining competitive on prices.
FMI had warned in September that elevated diesel prices could eventually translate into higher grocery costs. The association also identified weather disruptions and global supply chain developments as potential risks to food prices.
Overall Inflation Remains Elevated
The broader CPI increased 0.4% in October, compared with 0.6% in September. Economists surveyed by Reuters had expected a 0.3% increase.
Core inflation, which excludes food and energy, increased 0.3%, matching September’s pace. Shelter costs rose 0.3% and accounted for more than 30% of the overall monthly increase.
The BLS did not publish year-over-year inflation figures for October because the 2025 federal government shutdown prevented the collection of comparable data that month. In September, annual inflation stood at 3.7% overall, while grocery prices were 1.8% higher than a year earlier.
For food retailers, October’s results present another challenge as they balance rising supply chain expenses against continued consumer demand for value.
Harig said FMI would continue monitoring global developments, weather conditions and commodity supplies that could affect grocery prices in the months ahead.
“Despite these headwinds, food retailers will continue working every day to manage costs, maintain dependable supplies and deliver the quality, choice and value shoppers expect,” he said.
The next CPI report, covering November, is scheduled for Dec. 10