During President Donald Trump’s campaign before winning the 2024 presidential election, he promised on his first day of office to “immediately bring prices down, starting on Day One” for groceries — but that hasn’t happened so far.
Be Aware: 5 Ways Trump’s ‘Big, Beautiful Bill’ Could Impact Your Wallet
Learn More: How Middle-Class Earners Are Quietly Becoming Millionaires — and How You Can, Too
Average food prices in the United States have increased by 2.9% in the 12 months ending July 2025, according to U.S. inflation calculator. It’s a few ticks higher than the 2.7% inflation rate across all categories. The Federal Reserve’s preferred core inflation metric shows a 3.1% year-over-year increase, since it doesn’t include volatile food and energy prices. Trump has done well with energy, as those prices have dropped by 1.6% year-over-year.
He’s shown an ability to follow up on promises and even has lower energy prices, but grocery prices still remain elevated. There are a few reasons why that’s the case, and some of them are connected to Trump’s policies.
Tariffs Are a Key Component
After some false starts and negotiations with trading partners, tariffs are now in effect, and they have been contributing to higher food prices. Grocery stores like Walmart and Whole Foods have to hike their prices to keep up with the tariffs.
Although critics may question why Walmart, a global retailer that reported more than $7 billion in consolidated net income in Q2 FY26, has to raise prices, it makes sense. Despite Walmart’s vast retail presence and high profits, the company only operates on a 2.5% to 4% net profit margin, depending on the quarter. If prices go up by 10%, Walmart has to respond to the higher prices to preserve a positive profit margin.
The Tax Foundation projects that nearly 75% of all U.S. food imports will be affected by Trump’s tariffs. If tariffs linger or get higher in the future, it can lead to a short-term price hike in food prices. That short-term price hike would only decrease if some tariffs got negotiated away or the U.S. produced enough food to balance the supply-and-demand dynamics.
Find Out: 4 Mistakes the Upper Middle Class Are Making With Their Money in the Trump Economy
Beefy Price Hikes
The grocery bill looks different for each person based on what they buy, but if you like to eat beef, grocery inflation will show up more for you.
The U.S. Department of Agriculture (USDA) found that retail beef and veal prices increased for the seventh month in a row from June 2025 to July 2025. Beef and veal prices increased by 2.5% month-over-month and are up by 11.3% year-over-year. The USDA anticipates beef and veal prices going up by 9.9% in 2025. Tight supplies of beef and veal are playing a role in the elevated prices.
Beef and veal are the main headliners, but other food categories are also due for higher prices. Eggs, sugar and sweets, and nonalcoholic beverages are also expected to grow faster than their 20-year historical average rate of growth.
If you’re looking for a deal, you might want to shop around for other meats, fats and oils and fresh vegetables. Those are the food items the USDA expects will see price cuts.
It’s More Expensive To Eat Out
While it’s been known for a while that eating out is more expensive than prepping your own meal, it even applies to inflation rates. The USDA found that grocery store and supermarket food purchases had a 0.1% month-over-month price hike compared to the 0.3% month-over-month price hike for restaurants and other food service providers.
The USDA also shared in research published on Aug. 25 that groceries are up by 2.2% year-over-year, while restaurant food and similar services are up by 3.9% year-over-year. Food as a whole is predicted to become 2.2% more expensive in 2026. The rate of inflation is only expected to be 1.2% for groceries, while dining will cost an additional 3.3% in 2026.
These forecasts do not suggest an immediate solution to rising food prices. Trump still has time to reduce food prices, but tariffs and the USDA’s 2026 projections don’t paint a bright picture for lower food costs.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
This article originally appeared on
GOBankingRates.com:
Trump Said He’d Lower Grocery Prices on Day 1: See Where They Stand Now
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
