Food Distributors NAICS 4244

May 30, 2025 - Grocery Prices Fell in April

• Grocery prices fell in April for the first time this year, posting their biggest drop since 2020, according to the latest data from the Bureau of Labor Statistics. The consumer price index (CPI) for food fell 0.1% in April as the food-at-home index decreased 0.4% and the food-away-from-home index rose 0.4% over the month. Five of the six major grocery store group indexes dropped, led by a 12.7% decrease in egg prices. The index for meats, poultry, fish, and eggs declined 1.6% in April after recent increases. Nonalcoholic beverages was the only category that saw an increase, rising 0.7%. However, the impact of import tariffs has largely yet to be felt by shoppers, 57% of whom say they’re very or extremely concerned about tariffs and their potential impact on food costs, according to US Grocery Shopper Trends 2025 by FM.
• One of the US’s largest supermarket operators is telling suppliers it won’t accept any price increases due to President Trump’s tariffs on imports, Supermarket News reports. An April letter from Albertsons’ head of merchandising to suppliers reads: “With few exceptions, we are not accepting cost increases due to tariffs,” adding “Suppliers are not permitted to include tariff-related costs in invoices without prior authorization by Albertsons Companies. Any invoices that include such charges without prior authorization will be subject to dispute and may result in payment delays.” Once submitted, the company will take up to 30 days to review the forms and approval is not guaranteed, per SN. As intermediaries between food manufacturers and retailers, food distributors are stuck between grocers taking a hard-line approach regarding tariff-related price increases and manufacturers looking to pass along higher costs to consumers.

• In a move aimed at taking a bigger bite out of the $1.5 trillion grocery market, Target is bringing its supply chain for fresh and frozen food in-house, The Wall Street Journal reports. One of the top sellers of groceries in the US, Target has opened three new food-distribution centers over the past two years and plans to add another in Colorado in 2026, expanding its grocery logistics network to nine temperature-controlled facilities nationwide, according to WSJ. Target’s new warehouses are meant to help place goods close to its stores to keep shelves stocked with in-demand items. Historically, Target has relied on grocery wholesalers to supply fresh foods to its stores, but as its sales have grown the retailer has opted to build out its own logistics network for perishables to better forecast demand and plan inventory, eliminating the middleman between it and its suppliers.
• Employment by grocery and related product merchant wholesalers grew 2.4% in March compared to a year ago, while average industry wages were flat over the same period at $27.12 per hour, according to the latest US Bureau of Labor Statistics data. Producer prices for merchant wholesalers of nondurable goods, including groceries, eased in April after peaking in March. Sales for food distributors rose 1% year over year in February but fell 5.8% from January, according to the Census Bureau. Looking ahead, sales for the US food distributors industry are forecast to grow at a 3.06% compounded annual rate from 2025 to 2029, slower than the growth of the overall economy, according to the Interindustry Economic Research Fund.