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Grocery Prices May Climb Again as Fuel Costs Rise


Grocery Prices May Climb Again as Fuel Costs Rise

 

Grocery prices had started to level off this year, but rising fuel costs could soon push them back up.

For months, shoppers finally caught a break. Food prices held mostly steady through the year. But new numbers from the US Bureau of Labor Standards show energy prices jumped 20.4% in September, the biggest jump since May. That spike is a big reason overall inflation picked up speed last month.

The cause traces back to attacks on oil tankers and energy sites in Iran, Saudi Arabia, and Russia. These attacks have made it harder to move diesel fuel around the world. Diesel is what trucks use to haul food from farms and factories to your local store, so when diesel costs more, groceries often cost more too.


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Big companies are already feeling it. Albertsons said this week that higher gas and diesel prices are squeezing its business. Spice maker McCormick now expects 7% inflation in its forecasts, partly due to energy costs. Its finance chief, Marcos Gabriel, said the company is facing higher costs for packaging and especially for freight, driven by fuel prices and limited shipping capacity in the US. Conagra, which owns brands like Birds Eye and Slim Jim, also expects prices to rise the rest of this year for the same reasons.

This is a sharp turn after a stretch of good news. Many of the tariffs from the Trump administration had been rolled back, and stores like Walmart and Costco said they were using tariff refunds to lower prices. Discount chain Aldi rolled out about $86 million in discounts on fresh food through November 3. Stop & Shop stores in the Northeast cut prices on thousands of items too.

But fuel prices are already climbing. As of Sunday, AAA says regular gas averages $4.36 a gallon, up from $3.09 a year ago. Diesel hit $6.28 a gallon earlier this month. Shipping through the Strait of Hormuz, a narrow and important waterway for oil tankers, has gotten riskier, and a cargo ship reportedly sank this week after hitting a mine there.

What this means for you

  1. Expect grocery prices to rise again, even if they felt stable lately.
  2. Watch for store sales and discount programs, since some chains are still offering deals.
  3. Budget a little extra for gas and food costs in the coming weeks.

This site exists to explain money news like this in plain terms, because nobody should need a dictionary to understand why their grocery bill is changing. As a next step, check your local store's weekly deals before your next shopping trip to get ahead of any price hikes.

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