Familinomics Index, April 2025: But Wait, There's More...
- Don Harrold
- Apr 7
- 3 min read
Pricing for the April 2025 Familinomics Grocery Price Index is complete, and upon parsing the results, I could only think to myself...
After the explosive first month of growth from January to February (100.0 to 102.2), the Index has continued the trend of rising at a slower rate. April's Index read was 103.83, up from March's read of 103.36. The average cost of the 36 item marketbasket in April was $110.09, an increase from the baseline cost of $106.03 in January.
What accounted for the slowing rise was a rapid and substantial drop in the average price of a dozen eggs at the five surveyed stores, from $7.12/dozen to $5.38/dozen, a decline of 24.4%. This is attributable to the government's importing millions of eggs from South Korea and Turkey; while the carton might indicate your store's brand, the eggs within are likely imported.
The great thing about recorded data is that you can play what if, and I did so with the eggs. Assuming that there had been no change in the price of eggs from March to April and that the April price remained at March's $7.12, what would have happened to the Index reading?
It would have risen significantly to 105.47, or 1.64 basis points higher.
So what happened at the other end of prices?
The most notable change was in the average price of a 5 oz can of tuna, which rose by 14.9% on the back of one store's price explosion of 67%/can from March to April. That store's can skyrocketed from $.97 to $1.62/can, for reasons that are unknown. It's simply hard to tell if this was a one-off issue or an indicator of future issues.
But here's a tip on something that grocers will do to disguise a large price increase. Here, the grocer hid the per can cost by only selling the cans in a shrink-wrapped package of four cans, labeled at the package cost and I had to calculate the real cost per can. Another method is to have a notable sale on an item, perhaps lasting longer than a week, and then ending the sale with a return to the new and higher price. What I encountered in the previous Index, which ran from 2010 to 2016, was simply removing the item from shelves for a period and then returning it at the higher price.
This week's imposition of tariffs on a global scale, literally ramming a truck bomb into the showroom of world trade, has further added to the instability created by the President's constant hemming and hawing. The equity markets have undergone historic reversals and credit spreads are rising. Can macroeconomic instability play out on the microeconomic level, within the prices within the marketbasket?
A stable pricing environment would be a consistent and reliable rate of change across a swath of prices. The economist's Nirvana is an environment in which business gets a slow and steady rise in prices that is matched by a corresponding rise in consumers' incomes. There might certainly be one-off shocks, but the mass of prices would be within consistent parameters. So, think of a price index as measuring the direction and speed of an airplane. Does the activity of prices within the basket also serve as the measure of the turbulence and volatility of the plane's flight?
We're going to try to answer that question.
The statistical measure of volatility is standard deviation, and I began to track that in the monthly price changes in February. With three months under belt, we're going to follow them on an on-going basis.
What's notable about the data from the four months is the sheer range of item price changes starting in February and expanding higher through April. The range is the difference between the lowest and highest price changes for the basket items during that period. In April, the range of 39.32 was from a price drop of 24% for eggs from March/April through a spike of almost 15% for tuna.
The next standout is the volatility of the price changes as expressed by the standard deviation of price changes about their mean. I have also expressed this as the Coefficient of Variation. Standard deviation was high at February's 5.57 but dipped to the more normal 1.9 in March before exploding upwards to 6.85. For reference, most data falls within a standard deviation of 2, so February and April standard deviations are extremely high. Now that the tariffs have been enacted, we're about to see where this goes.
By the way, if we're getting price relief on eggs from imports, will there be a tariff placed upon those eggs?
Why, yes. Yes, there will.
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