Grocery Shoppers Are In For a Summer of Pain

The Iran war’s effects will keep rippling through the supply chain, even if it ends.

Takeaways

by Bloomberg AI

• Experts believe food prices will get worse due to factors including the war in the Middle East, tariffs, and weather.
• The latest consumer price index report shows "food at home" was up 0.7% in April compared with March, and 2.9% higher than in April 2025, with increases in prices of beef, fruits, and vegetables.
• Rising food prices are causing consumers to make difficult choices, including switching to private-label options, wasting less food, and in some cases, deciding who gets to eat or whether to buy food or medicine.

As painful as food prices have been over the past several years, there’s reason to believe it’s only going to get worse from here. This is what we’re hearing from the experts, in both food and agriculture, taking into account everything from the war in the Middle East to the continuing effects of President Donald Trump’s tariffs and even the weather.

Anyone who hosted a Memorial Day weekend cookout almost certainly noticed the higher prices for beef hot dogs (up 18.3% from a year earlier), fresh ground beef (up almost 15%) and soda (11.4%), according to Datasembly, a company owned by retail data collector Spins. Even barbecue sauce saw an 11.6% jump.

At Walmart Inc., the biggest US grocery seller, the company is warning of shoppers’ worsening financial situations. “The low-income consumer, we can tell, is more budget-conscious, trying to navigate certain financial distress,” Chief Financial Officer John David Rainey told Bloomberg News in an interview earlier this month. Fast-food giant McDonald’s Corp. had to balance its good earnings news of a strong early 2026 with CEO Chris Kempczinski’s warning that, with high gasoline prices due to the US war with Iran, there’s “heightened anxiety” from consumers.

The latest consumer price index report showed the pace of food inflation speeding up. “Food at home” in April was up 0.7% compared with March, the most in almost four years, and 2.9% higher than in April 2025. On paper, the increase might sound relatively small, but it’s hard for most of us to ignore the creep as each grocery store trip seems to be more expensive than the last. It’s not just beef — up 2.7% in a single month. Fruits and vegetables are up 1.8%, driven in large part by tomatoes, which, with a 19% jump, hit an all-time high of $2.689 per pound in April.

Richard Volpe, a professor of agribusiness at California Polytechnic State University, in a webinar hosted by a grocery industry trade group, characterized that 0.7% increase as being driven by several factors. For the part attributable to the war in Iran and the closure of the Strait of Hormuz, it represented just the “short-term impact.” “Even if the conflict were to be resolved today,” he said, effects would hit the food system “well into late summer and the fall,” or even 2027 for some products, including animal protein.

Particularly important is the price of energy, Volpe told me in an interview. Retail prices for diesel are up 57% compared with last year, according to the AAA. That impacts food prices too, more than we may realize. Trucks are “the glue” that holds the food system together, Volpe says, and as the cost of driving goes up, especially for energy intensive refrigerated trucks, so will prices on supermarket shelves. And, he says, “Those rates are skyrocketing.”

And what happens when farmers are dealing with fertilizer prices that are about twice what they were a year ago, as Volpe estimated? Do they grow fewer acres? Spread less fertilizer on the same acreage and accept a lower yield? Change what they’re growing? Stick with the same plan as last year and then pass the costs to their customers? These decisions will be reflected in the prices we pay at checkout. Then there are the tariffs, which are a major force behind not just the tomato situation but also, Volpe said, for everything that comes in aluminum, like the sodas at the cookout or the tinned fish that is all the rage these days.

Trump’s 2024 campaign promised to bring down grocery prices, and yet his policies are behind some of the increase. But they’re not the only reason. An unusually warm winter in California, Volpe said, means the Sierra Nevada don’t have their usual snowpack to run down in the valleys where so much of our fruits and vegetables are grown.

As prices go up, consumers make choices. Many of us have been doing that for years, constantly trying to get ahead of the latest surges. We shop at more stores — Kroger Co. announced price cuts that we can hope will spur a price war. We switch to private-label options, maybe load up on some extra beans, waste less food. But what else is left to do? I love bargain hunting and repurposing leftovers, but I’m coming up short on new tips and tricks. When I asked my LinkedIn network how they were coping with higher beef prices, even the former spokesman for the National Cattlemen’s Beef Association said he was swapping in more pork.

For the millions of people who are losing their Supplemental Nutrition Assistance Program benefits, also known as food stamps, the consequences of rising prices are more dire. It’s about deciding who gets to eat (usually the kids) and who skips a meal (the parents), or whether today is a day for food or medicine. With elevated gas prices, these choices will extend far beyond the kitchen.

If the past is prologue, it’s worth looking at what happened in 2022, when Russia invaded Ukraine. Gas and food prices shot up then too, and as NielsenIQ outlined in late March, the higher prices “reshaped demand.” Early etchings of today’s K-shaped economy became apparent: Lower-priced private-label products went mainstream, while more expensive “better for you” items held on to consumers better than their conventional counterparts did. “If the Iran conflict becomes prolonged, we anticipate similar demand shifts,” the NielsenIQ analysts wrote. Better-for-you sales are still on the upswing, but what about the people who have made all the trade downs they can and are still left without enough?

My take: At least it’s gardening season, so if you have even a little outdoor space, it’s a good time to grow your own tomatoes. Home Depot is selling two potted plants for around $10. Sounds like a good deal to me.