Study: Grocery costs hit consumers the hardest in these cities
Two Midwestern cities top the list of places where consumers spend the most on groceries relative to income.
According to a new report from WalletHub, residents of Detroit (4.03%) and Cleveland (3.93%) have the highest cost of groceries as a share of median monthly household income, with Birmingham, Ala., not far behind at 3.45%.
Toledo, Ohio (3.20%) and Newark, N.J. (3.15%) round out the top five, with Baton Rouge, La. (3.11%), Buffalo, N.Y. (3.10%), Memphis, Tenn. (3.07%), Cincinnati, Ohio (3.05%) and Hialeah, Fla. (2.99%) also among the cities that are hardest hit by the cost of groceries relative to income.
To find the data, WalletHub analyzed the prices of 26 common grocery items across 100 of the largest U.S. cities. It then totaled the cost of these items and compared it with median household income to determine where residents spend the largest share of their income on groceries.
On the opposite end of the spectrum, residents of highly-affluent areas including Fremont, Calif. (0.91%), San Jose, Calif. (1.07%), San Francisco (1.10%), Irvine, Calif. (1.21%) and Gilbert, Ariz. (1.32%) spend the least amount of their monthly income on groceries.
[READ MORE: Numerator: Prices have increased 35% for low-income households since 2019]
“In the cities where people spend the most money on groceries, residents often have low incomes on top of seeing high sticker prices on common grocery items,” said Chip Lupo, WalletHub writer and analyst. “Shoppers should take advantage of sales and coupons, buy generic items and buy in bulk if possible in order to save money. It’s also a good idea to use a credit card that gives a good amount of rewards on grocery purchases and pay it off in full each month.”
Notably, Detroit and Cleveland also topped WalletHub's recent list of cities where consumers spend the most of their monthly household income on fast food, with Buffalo, N.Y., coming in third.
WalletHub detailed its findings about the top-three cities below:
Detroit
“People in Detroit spend the most on groceries, which have an average cost of over 4% of the median household income, the highest percentage in the country. For comparison, Fremont, Calif., residents spend an average of less than 1% of their income on groceries, the lowest percentage.
Overall, Detroit has the 39th-most expensive groceries out of the 100 cities in our study, so its prices are relatively average. There are a few types of groceries that are very expensive or very inexpensive relative to other cities’ prices, though. Detroit has the sixth-most expensive lettuce prices in the country, along with the 28th-highest sugar prices and 16th-highest whole milk prices. However, for quite a few types of groceries, such as ground beef, chunk light tuna, and peaches, the city’s prices are among the least expensive in the nation.
The biggest reason why Detroit residents spend such a high percentage of their income on groceries isn’t high prices – it’s the fact that the city has the lowest median annual household income in America, at just $39,938. As a result, every dollar that people in Detroit spend on groceries takes up a disproportionately high share of their earnings compared to people in cities with higher incomes.”
Cleveland
“Cleveland residents spend the second-most money on groceries as a percentage of their income, at over 3.9%. This is mainly due to the fact that Cleveland has the second-lowest median household income in the country, at $40,801 per year.
In addition, there are a few major categories of groceries that are more expensive in Cleveland compared to most other cities in our study. For example, Cleveland has the 17th-highest shortening prices, the 13th-highest soft drink and 15th-highest for banana prices in the country. For certain other grocery items, Cleveland has relatively low prices. In fact, whole milk, coffee and peaches are all relatively cheap in the city.
Reasonable grocery prices unfortunately aren’t able to make up for Cleveland’s low median incomes.”
Birmingham, Ala.
“Birmingham, Ala., residents spend the third-most money on groceries relative to what they earn, shelling out around 3.5% of the median household income each month. As is the case with the other high-spending cities, Birmingham has low incomes. The median household income is $46,051 per year, the fifth-lowest in the country.
Birmingham has the 12th-most expensive potatoes in the nation, along with the 13th-most expensive peaches. However, overall, its grocery prices are not that high. In fact, it’s one of the least-expensive cities for coffee, frying chicken and shortening. The fact that residents spend a very high percentage of their incomes on groceries is mainly due to how low the median household income is.”
WalletHub’s full report can be found here.
