I went shopping today and thought it was time enough to update my “Basket of Goods” category since it’s been a while since I measured inflation. I like to measure my own inflation because I don’t trust any BLS report that comes from the government. All sorts of hedonic adjustments and other crap are factored into government reports. I like to get down to the brass tacks and get my own information for my own neighborhood and here’s what I found:

Deflation Grocery 2009

Item Sep 07 Apr 08 Jan 09 %Change
1 Dozen Eggs $2.09 $2.39 $2.39 0%
1 Gal Org. Milk $5.99 $5.99 $5.99 0%
16 / 14.5 oz Box Cereal $2.39 $2.47 $1.98 -24.7%
1 Loaf Bread $2.19 $2.48 $2.44 -1.63%
12 oz Bacon $2.68 $1.88 $1.49 -26%
Rib Eye Steak $7.87/lb $8.48/lb $8.49/lb 0.1%
2.5 Gal Water $2.69 $2.69 $2.50 -0.8%
         

I actually didn’t believe the numbers when I was putting them together.   I hope I didn’t do the math wrong on the calculations.  I tend to screw up simple math but can handle complex equations rather easily; I haven’t been able to figure out that one.

The price of cereal dropped a whopping 24% and this was the biggest shocker for me.   My kids LOVE cereal and I clearly recall cereal costing $4 or $5 a box last year but when I went shopping most cereals were selling for $2 or less.  The size remained stable at 14.5 oz too, no shrinkage!  It didn’t appear to be a “sale” price either as I didn’t see any sale tags; I think that’s they everyday price right now.

The second shocker was bacon.   A 12 oz package of bacon dropped down to $1.49 or 26% from the last time I checked the price.    I try to be consistent and buy the same brands but the brand I was previously buying was no longer sold at the store so I switched to another brand.   There were several brands selling for $2/5 but the everyday price was $1.49.

There were slight decreases in the cost of bottled water and a loaf of bread (same size as last time).   The only increase was the cost of beef rib eye steaks.  The cost actually went up a penny so I wonder if the beef industry or the grocer is hosing the consumer.   If cereal grains are down then why isn’t beef?

I’ll try to do this quarterly from now on as was my original plan but there is no doubt that deflation has hit the grocery store.