Why grocery prices are rising again on Long Island

Linda DiPaola reels from sticker shock at the grocery store.

The Franklin Square retiree and her husband, who works full-time, are empty nesters feeling the pinch of high grocery prices while trying to maintain a nutritious diet.

“But the thing is, we’re used to eating well, so when you eat well all your life, it’s challenging. But you do cut back on certain things,” she said inside a Holiday Farms supermarket in Franklin Square on Wednesday last week.

She misses the prices that were in grocery stores a few years ago, she said.

“I just wish things would settle down and come back to normal. You know, what’s normal? What’s today’s normal,” said DiPaola, 66.

Long Islanders have been feeling the sting of rising grocery prices since annual average grocery inflation in the metropolitan area, including Long Island, hit a 48-year high of 10.2% in 2022. Price growth slowed afterward, but grocery inflation has recently accelerated to levels not seen in years.

From March to April, inflation for groceries, or "food at home," in the metropolitan area was 1.5%, the biggest monthly increase since July 2022, when it was 2.5%, according to data published Tuesday by the U.S. Bureau of Labor Statistics.

Grocery inflation in April compared to the same month last year was 5.9%, the biggest annual increase since April 2023, when it was 6.1%.

The war in Iran, which began Feb. 28 and has disrupted fuel shipping traffic through the Strait of Hormuz, is the biggest factor in recent grocery price hikes, said Adam Kamins, senior regional economist at Moody’s Analytics, an economic research provider in Manhattan.

Diesel fuels the trucks that transport food and the machinery used on farms, while petroleum byproducts are used to produce fertilizer.

“I expect that what we’re seeing now, it may not be the new normal [in terms of prices], but it’s pretty close at least for the rest of this year,” Kamins said.

Among the different food categories, fruits and vegetables had the biggest year-over-year price growth in April, 11.8%, in the metropolitan area.

That is partly due to extreme cold weather in Florida and other parts of the United States this past winter into spring, which reduced crop production, said Tom Jackson, economics manager at S&P Global Market Intelligence, a market information provider based in Manhattan.

Higher labor costs and fewer workers at farms due to heightened immigration enforcement were other factors, he said. 

Point of no return?

Overall grocery prices in the metropolitan area are now 26% higher than they were in April 2020, the month after the COVID-19 pandemic began leading to temporary business shutdowns and home quarantines.

Some consumers are hoping for a return to pre-pandemic prices. Not only is that very unlikely to happen, but also it would be a bad sign for the economy because overall price declines, or deflation, generally correspond to a recession, said Chris Barrett, a professor of agricultural economics at Cornell University.

“It’s very natural for people to want prices to go back where they were," he said. "That’s a very, very rare occurrence for the entirety of a grocery cart. … But food price inflation is like a ratchet. It really moves one way only.”

One reason is that the prices consumers pay at the register directly reflect the cost of doing business, Barrett said.

For example, about half of a customer’s grocery bill goes toward labor expenses, such as store employees’ wages, truckers who bring commodities and workers in manufacturing facilities, he said.

“So, if we wanted to return to pre-pandemic food prices, you have to ask yourself, whose paycheck is going to get cut?”

New Hyde Park resident Lee Anne Pallisco and her husband, both retired, are finding that grocery shopping is increasingly taking a larger share of their budget.

The Palliscos, who are empty nesters, have cut back on expensive cuts of meat and are trying to waste less food to stretch their grocery dollars, said Pallisco, 67, while at the Holiday Farms supermarket in Franklin Square last week.

“It’s challenging," she said. "When we were raising our family, we did without a lot. And you know, you hope that once you get to a certain age, things can become more comfortable. And it’s not really happening.”

For the past several years, consumers have responded to higher grocery prices by shopping more often at discount stores and increasingly replacing brand-name products with cheaper store brands, grocers said.

Fast-growing discount grocer Aldi, which opened 200 U.S. stores last year and plans to open 180 in 2026, drew 17 million new U.S. customers last year, the German chain said. Among the grocer’s more than 2,400 U.S. stores are 19 on Long Island, including one that opened in Great Neck last month and three that opened in Medford, Bethpage and Lake Ronkonkoma in 2025.

At Stew Leonard's grocery stores, more consumers are buying discounted products than in the past, said Stew Leonard Jr., president and CEO of the Norwalk, Connecticut-based supermarket chain, whose eight stores include two on Long Island.

Leonard said his stores were absorbing some rising costs instead of passing all of them on to customers.

“We’re not going to end up with any banner year, or anything like that,” he said.

Rising utility, insurance and, particularly, labor costs are growing more challenging for supermarket operators, third-generation grocer David Mandell said.

The minimum wage has increased 50 cents annually statewide since 2024 and is now $17 an hour on Long Island and in New York City.

The cost of doing business is not the only issue, said Mandell, adding that his stores are losing sales "to Amazon, Trader Joe’s, and Aldi and Lidl," among other competitors.

"This is a tough business," he said.

Mandell said rising business costs, growing competition and tighter consumer budgets led him to sell his 45-year-old grocery store in Queens last year, leaving him with two stores in Queens and four on Long Island, including the Holiday Farms in Franklin Square, he said.

Higher grocery prices are not translating to more profits for farmers, partly because their expenses for equipment, fuel and other needs are rising, said Faith Parum, an economist at the American Farm Bureau Federation, a nonprofit organization based in Washington, D.C.

“Farmers can’t pass that along to the consumer. They just have to take what the market gives them,” she said.

About 5.8 cents of every dollar spent on groceries goes to farmers, down from 7.4 cents in 2014, she said.