CHICAGO—Food and beverage price inflation appears to be slowing. According to IRI, prices for food and beverages last month were up 0.3% over October—less than the 0.5% jump in October compared to September.

Overall food inflation grew 13.2% versus one year ago; however, monthly increases compared to one year ago have leveled off over the last four months. According to IRI, consumers are continuing to employ a range of strategies to reduce spending, such as switching to private labels, trading out of expensive food categories and trading down to mainstream and value brands, as well as consuming more at home versus away from home.

“The pace of food inflation is leveling off but remains at a robust 13% level versus one year ago,” said Krishnakumar (KK) Davey, president of Thought Leadership for CPG and Retail, IRI and NPD. “IRI anticipates consumers will continue their trading down behavior over the December holidays and into the new year. However, in some segments, consumers will splurge to celebrate the holidays. Retailers and manufacturers with an in-depth understanding of consumer strategies have an excellent opportunity to build loyalty by offering products, price points and package sizes that provide good value.”

Food segments that have seen the largest month-over-month price decreases included root vegetables (-7.2%), bacon (-3.4%), butter/margarine/spreads (-2.0%) and chocolate candy (-2.0%). Fresh meat and seafood and beverage alcohol segments rose just 4.3% versus October and 6.3% versus one year ago. However, other categories rose dramatically, such as dairy (+23.4%) and bakery (+18.4%).

IRI found that inflation has moderated in perimeter areas, including produce and deli. These spots have seen inflation moderate to 8.2% versus one year ago, while inflation within center store, which includes snacks, frozen meals and other frozen foods, leveled off in November at 14.9% versus one year ago.

Over Thanksgiving, consumers were not fazed by the increase in food and beverage prices. Even though inflation for the typical Thanksgiving meal was up 14.2% versus one year ago, Thanksgiving volume sales saw an uplift in 2022 of 72% (versus pre-Thanksgiving weeks), an increase of 6 percentage points versus the year-ago Thanksgiving, suggesting that overall, Thanksgiving celebrations were not impacted by inflation.

Thanksgiving inflation was driven by pies (+16.6%), side dishes (+17.8%) and baking (+17.4%), while main dishes were up 11.8% versus one year ago. IRI found that about 44% of Thanksgiving sales were sold on deal, which is similar to 2021. Fifty percent of main dishes and 54% of pies sales were sold on promotions.

Over the holiday, major retailers discounted holiday meal items, and convenience retailers offered specials including Pilot Flying J and Love’s.

Overall, inflation slowed down in October with the consumer-price index (CPI) up 7.7% in October year over year, down from 8.2% in September and the four-decade high of 9.1% in June. November CPI numbers will be released tomorrow morning.