Americans are experiencing a frustrating economic paradox: Overall inflation has cooled considerably, yet grocery prices continue climbing steadily. This phenomenon has a name in economic circles: the “rockets and feathers” effect, and it explains why shoppers who hear good news about inflation’s decline still feel the pinch at the checkout counter.
The explanation is straightforward in theory but painful in practice. Food prices rose like rockets in the years following the pandemic, surging 11.4 percent in 2022 in what amounted to the sharpest increase in grocery prices in 50 years. While inflation has since slowed, prices are falling like feathers, meaning they descend slowly if at all. Prices do not reverse when inflation falls; they simply stop climbing as fast. The cumulative damage from those earlier spikes remains baked into the current price structure.
“I think the public is coming to grips with, ‘Well, I’m hearing inflation has slowed, but things aren’t getting any cheaper.’ It has to be deflation for prices to go down, and that’s very rare,” said Matt Hamory, who leads the global grocery practice at AlixPartners, a consulting firm.
The distinction between lower inflation and lower prices is lost on most consumers navigating their budgets. If a grocery bill rose from $200 to $240, that is a 20 percent increase. If it rises from $240 to $250 the following year, inflation has slowed dramatically. But the bill did not return to $200. Shoppers are still paying $50 more than before.
According to the U.S. Department of Agriculture, prices for food at home are expected to rise 2.7 percent across the country this year, above the grocery inflation shoppers saw in 2024 and 2025. Despite recent moderation, food prices have climbed 29.5 percent since December 2019, a cumulative increase that continues to frustrate American consumers. Some items have experienced even steeper increases. The average price of coffee has risen 54 percent since 2019, driven by climate issues including drought in Vietnam, heavy rain in Indonesia, and hot, dry weather in Brazil that have reduced global coffee yields.
Several factors contribute to the feather side of the mountain, where prices refuse to fall quickly. Retailers are reluctant to lower prices on inventory they ordered when wholesale prices were high. This creates a lag between wholesale cost declines and retail price reductions.
Consumer behavior also matters. When prices spike, shoppers actively hunt for deals, forcing retailers to remain competitive. But once prices start coming down, consumers often stop comparing offers, removing the competitive pressure that would push retailers to cut prices further.
In some cases, the problem extends well beyond basic economics. Fresh tomato prices jumped 19.5 percent in June compared to a year earlier because of a 17 percent import tax the Trump administration placed on fresh tomatoes from Mexico. Various sectors face distinct pressures: eggs have been volatile due to avian influenza outages, while beef prices remain elevated from reduced cattle herds stemming from drought conditions that affected ranchers nationwide.
Food inflation is the result of what economists call a “collision of factors.” Some are easing while others are still hitting. Consumers also compare current prices to pre-pandemic levels rather than year-ago figures, creating a psychological anchor that amplifies perceptions of ongoing inflation. While food inflation at 2.2 percent appears modest compared to housing or auto insurance increases, people notice grocery prices because they purchase these items frequently and regularly.
Some signs suggest relief may be emerging. In early July, Walmart announced it was rolling back prices on ground beef, corn, red cherries, ice cream, potato chips, and major soft drink brands. However, whether these moves signal a broader shift remains uncertain. The U.S. Department of Agriculture predicts uneven trends ahead, with eggs potentially falling 22.2 percent while beef prices could rise as much as 9.4 percent in 2026.
The grocery sector itself operates on notoriously thin margins that offer little room for price relief. Average net profit margins for food retailers sit at 1.7 percent, compared to margins that briefly spiked to 3.0 percent during the pandemic. These razor-thin margins mean that when wholesale costs rise, retailers have limited flexibility to absorb the increases without raising shelf prices. Rising labor costs and operational expenses have further squeezed the industry.
Until genuine deflation occurs—a rare economic event where prices actually fall rather than simply rising more slowly—American grocery shoppers are likely to remain frustrated by the persistent gap between what economists report about inflation and what they actually experience when filling their shopping carts.