The Great Grocery Illusion

Inflation cooled — but your grocery bill never did

By Joe Palaggi

The headlines say inflation is down. The politicians call it progress. But for most Americans, those headlines don’t make it past the checkout line. Prices may not be climbing as fast, but they never came back down. Grocery inflation cooled only after household budgets were scorched.

Before COVID, grocery prices were stable. In 2019, “food at home” inflation was just 0.7 percent. Then the pandemic hit: empty shelves, labor shortages, and higher shipping costs pushed prices up 3.9 percent in 2020, 6.5 percent in 2021, and a staggering 11.4 percent in 2022 — the sharpest climb in four decades. Prices have since “cooled” to around 2–3 percent growth, but they’re cooling on top of a mountain. A $100 basket of groceries in 2019 now costs $125 to $130.

Gasoline followed the same arc — $2.60 a gallon in 2019, peaking near $5 in 2022, now around $3.05. Energy prices dropped from panic highs but never returned to normal. What families are living through isn’t relief; it’s endurance.

The new cost of food

COVID didn’t just raise prices; it rewired how food is made and moved. Fertilizer costs doubled after global shortages and trade duties. Tariffs on tin-plate steel added 10 to 15 percent to canned goods. Farm-worker shortages and higher trucking costs pushed harvest and transport prices up. And energy — the quiet backbone of the food chain — stayed expensive. When every step from fertilizer to freezer depends on fuel, the math doesn’t favor lower prices.

These costs became the new baseline, and once supply chains adapted, there was little incentive to roll prices back. Companies moved on. Families didn’t.

The political mirage

Washington talks in twelve-month increments because that’s how inflation is reported. Year-over-year numbers sound tidy on cable news, but they hide the compounding reality. A two-percent increase on top of a 25-percent surge isn’t progress.

Both parties have played the game. The Inflation Reduction Act was advertised as a cure, but even the Congressional Budget Office called its impact on inflation “negligible.” It funded climate and healthcare projects, not cheaper groceries. While Washington celebrated a statistical victory, Americans paid a quiet tax on food and fuel.

What could actually help

There are real levers to pull — none flashy, but all practical.

Fertilizer and inputs: Suspend phosphate duties and expand domestic nitrogen production. That alone could shave 3–5 percent off produce and grain prices.

Packaging tariffs: Reform tin-plate tariffs to cut 10 percent off canned and packaged goods.

Labor and logistics: Simplify H-2A visas and invest in refrigerated rail to reduce spoilage.

Competition: Enforce antitrust laws on food processors and retailers that dominate pricing.

Regional resilience: Support smaller food hubs that shorten supply chains and reduce transport costs.

Together, these steps might reclaim 5–10 percent of the price surge over time — not a revolution, but a real, measurable impact.

Energy: the hidden multiplier

No cost drives inflation like energy. Every calorie we eat requires kilowatts, diesel, and natural gas. A truck running 500 miles adds pennies to each item on board — and those pennies pile up.

Real solutions start with stability. Streamline energy permitting for both fossil fuels and renewables. Expand refining and pipeline capacity to prevent shortages. Reward households for energy efficiency — insulation, heat pumps, smart thermostats — that can save $800 to $1,200 a year. Stabilizing energy costs is the surest path to stabilizing grocery costs.

A realistic reckoning

Even if all these reforms succeeded, we’d claw back maybe 10–12 percent of the total increase since 2019. That still leaves a permanent 15 percent step-up in prices — the inflation tax no one voted for. But that’s how recovery works in the real world. You don’t erase the past; you chip away at it.

Every dollar clawed back is a dollar that stays in a family’s budget instead of disappearing into overhead. And unlike stimulus checks or slogans, these fixes target the source of inflation itself.

Families don’t buy CPI indexes. They buy dinner, gas, and a little peace of mind. Until Washington stops celebrating lower inflation and starts pursuing lower prices, the great grocery illusion will persist — cooling the thermometer without curing the fever.