Grocery prices stayed flat in August but remain above last year

Grocery prices did not rise on average in August, but they also did not return to earlier levels. The Bureau of Labor Statistics reported September 11, 2026, that food-at-home prices were unchanged from July and 2.2% higher than in August 2025.

That distinction matters for households: a flat month means the average price level held steady, not that groceries became cheaper. The August data also show why food costs can feel very different from one aisle to another.

Restaurants continued to see faster price increases

Food-away-from-home prices rose 0.3% in August and were 3.4% higher than a year earlier, according to the Bureau of Labor Statistics. Full-service meal prices increased 0.4%, while limited-service meal prices were unchanged during the month.

By comparison, the food-at-home index was unchanged month to month and up 2.2% over the year. The monthly figures are seasonally adjusted, while the 12-month comparisons are unadjusted measures comparing August 2026 with August 2025.

Grocery aisles moved in different directions

Several grocery categories increased in August. Egg prices rose 2.9%, dairy and related products increased 0.3%, and nonalcoholic beverages rose 0.2%. The broader meats, poultry, fish and eggs group increased 0.1%.

Produce moved the other way. Fruits and vegetables declined 0.4% in August, while lettuce prices fell 6.2% after dropping 16.4% in July. Cereals and bakery products were unchanged.

The year-over-year picture was also uneven. Nonalcoholic beverages were up 3.7%, fruits and vegetables rose 3.2%, and cereals and bakery products increased 2.6%. Meats, poultry, fish and eggs were up 1.1%, while dairy and related products were down 0.3%.

The annual category data also put the egg increase in perspective. Eggs rose in August, but the broader meats, poultry, fish and eggs category was up only 1.1% over the year. The USDA Economic Research Service reported that retail egg prices were 25.7% lower in July than a year earlier.

USDA expects food inflation to remain uneven

The USDA’s August Food Price Outlook projects food-at-home prices will rise 2.5% in 2026, with a 95% forecast interval of 1.7% to 3.3%. Food-away-from-home prices are projected to rise 3.6%, with an interval of 3.2% to 3.9%. The outlook was updated August 25 and is based on statistical models using recent trends, so these figures are forecasts rather than confirmed results.

USDA expects seven of the 15 food-at-home categories it tracks to grow faster than their 20-year historical averages. Beef and veal prices are projected to rise 9.8% in 2026, fresh vegetables 5.9%, sugar and sweets 7.1%, and fresh fruit 2.9%. Nonalcoholic beverage prices are forecast to rise 4.3%, also faster than their long-term average.

Other categories could move in the opposite direction. USDA forecasts retail egg prices to decline 30.8% in 2026, with a forecast interval of -35.3% to -25.3%, while dairy prices are expected to remain unchanged. The contrast illustrates why one overall food-inflation figure can conceal substantial differences between categories.

Diesel and freight are potential upstream pressure

Separate producer-price data released September 10 provided another signal to watch. The BLS reported that final-demand food prices increased 0.1% in August. Diesel fuel prices jumped 24.1%, and prices for truck transportation of freight rose 2.0%.

Those figures do not measure the prices shoppers paid at grocery stores. The Producer Price Index tracks prices received by domestic producers and prices for selected business services, while the Consumer Price Index tracks retail prices paid by consumers. Higher diesel and freight costs can add pressure to food distribution, but the August PPI numbers do not prove that grocery prices will rise by a particular amount or on a particular schedule.

What shoppers and food businesses should watch

The immediate consumer takeaway is straightforward: the average grocery bill did not increase in August, but it remained more expensive than a year earlier. Restaurants continued to experience faster price inflation than grocery stores, and category-level changes varied widely.

The next major retail-price signal will be the September CPI report, scheduled for October 14, 2026. Fuel and freight costs, beef supplies, produce prices and the categories highlighted in USDA’s forecast will also help determine whether August’s flat grocery reading represents stabilization or only a temporary pause.

Sources

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