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Annualised US food inflation remains above 10%

Food prices in the US were 10.4% higher in December than they were 12 months earlier, the latest government data shows.

The rise compared to a 10.6% year-on-year increase in November, according to data from the US Bureau of Labor Statistics.

The bureau’s latest Consumer Price Index also revealed food prices were marginally up on the previous month, rising 0.3%, although that increase was down on the 0.5% month-on-month increase recorded for November.

Some of the food categories still showing heightened levels of inflation include cereals and bakery, which was up 16.1% year-on-year. The prices of dairy and related products rose 15.3%. The cost of meats, poultry, fish and eggs was up 7.7%, the data showed.

The food-at-home index rose 11.8% over the previous 12-month period. The foodservice channel also saw a price hike with the index for full-service meals rising by 8.2%. According to the Bureau, food-away-from-home prices rose 8.3% over 12 months.

Food inflation continues to outpace general consumer price increases with
consumer prices rising by 6.5% in December year-on-year. This was down from November’s 7.1%.

Market watchers will be keen to see if pricing actions from supply chain inflation-hit US food manufacturers, passed on by supermarkets, are likely to continue this year.

Last week, Conagra Brands said it was in a “margin-recovery phase” as the food group’s sequential pricing catches up with input-cost inflation.

The snacks, frozen foods and cupboard staples supplier’s CEO Sean Connolly said margins are now “more in line with pre-pandemic levels” but, although it raised the outlook for growth and adjusted EPS, it still envisages gross inflation for fiscal 2023 to be around around 10% which it says has to be factored into conversations with retailers.

But Connolly said pricing will be “smaller and more targeted”, moving forward.

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