Food producers, manufacturers, and retailers are also adjusting to the changing market conditions by adopting more efficient production methods and improved technologies to counter higher costs. The U.S. Bureau of Labor Statistics data indicate that labor productivity (output per hour) in grocery stores has been on the rise, following years of decline. This may reflect consolidation in the retail grocery sector, more rapid adoption of new technology, and other efficiency-enhancing moves. Rising labor productivity has helped traditional retailers compete better with price-oriented competitors by reducing labor costs, which account for about half of operating costs.

Adjustments by producers, manufacturers, and retailers, along with continued strong retail competition, imply that U.S. retail food prices will remain relatively stable.