Grocery prices, what the Department of Agriculture calls food-at-home, are forecast to rise 1.8 percent in 2027, a deceleration from the 2.4 percent increase the agency’s Economic Research Service expects to close out 2026, according to the Food Price Outlook it updated September 25, 2026. The same forecast puts food eaten away from home, restaurant and takeout meals, rising faster next year at 2.6 percent than the grocery aisle. For a household on a fixed income, where the at-home grocery bill typically carries more weight than restaurant tabs, the slower number is the one that matters most.
A slower grocery number still leaves other home costs rising. The Senior Property Tax & Home-Cost Relief Kit’s circuit-breaker credit for renters and homeowners, plus its heating, cooling and home-repair help, address the fixed costs a grocery forecast does not touch. Compare property-tax relief options against a tighter budget →
Food-at-home prices, still rising, but slower: 2.4 to 1.8 percent
The Economic Research Service’s Food Price Outlook forecasts food-at-home prices, the grocery-store category, rising 1.8 percent in 2027 after an expected 2.4 percent increase in 2026. That is a slowdown in the pace of increase, not a decline; the agency’s own forecast still has the average grocery bill costing more in 2027 than in 2026, just by a smaller margin than this year’s rise over 2025.
The 2027 figure carries a wide prediction interval, -5.0 to 9.2 percent, that is far broader than the 1.8-to-3.3 percent range the agency attaches to its 2026 forecast. The agency’s own page attributes that widening to the level of uncertainty inherent in projecting a year further into the future, meaning the 1.8 percent midpoint is a central estimate rather than a number the agency is treating as settled.
For a retiree budgeting against Social Security’s annual cost-of-living adjustment, the distinction between a forecast and an outcome matters directly. A 2027 COLA calculated months before this projection was updated will not automatically track a food-at-home number that could land anywhere inside a range spanning from a modest grocery-price decline to a nearly double-digit increase, leaving a gap either direction between what the annual adjustment assumes and what groceries actually cost.
All food versus food away from home: a 2.0 percent versus 2.6 percent split
Beyond the grocery aisle, the same ERS forecast puts all food combined rising 2.0 percent in 2027, with food away from home, meaning restaurants and takeout, rising 2.6 percent, faster than either the at-home category or the all-food average. That gap between at-home and away-from-home inflation is not new: the agency’s 2026 forecast shows the same pattern, with food-at-home rising 2.4 percent against a 3.5 percent increase for food away from home, a full percentage point of separation in both years reviewed.
The persistence of that gap across two consecutive forecast years suggests restaurant and takeout pricing has been running consistently hotter than grocery-store pricing rather than the two moving in step. A household that shifted spending toward home cooking during the higher-inflation stretch of 2026 would, under the 2027 forecast, continue to see a smaller price increase than a household that eats out at a similar rate, a pattern the agency’s own two most recent annual forecasts both point to.
None of the three figures, 2.0 percent for all food, 1.8 percent for food-at-home, 2.6 percent for food away from home, describes what happens to any single grocery item; beef, eggs and produce have moved in sharply different directions from each other and from the all-food average throughout 2026, and the agency’s category-level detail, not the headline number, is what determines a given household’s actual grocery bill. A retiree who buys mostly produce and dairy will see a different real-world number than one whose cart leans toward beef, even though both fall under the same 1.8 percent projection.
A forecast built on a wide margin, not a fixed number
The Economic Research Service anchors its projections in actual recent price data: the agency’s own tracking put food-at-home prices up 2.2 percent year-over-year as of August 2026, and all food up 2.7 percent over the same period, the most recent real-world readings feeding into the 2027 projection rather than a guess made from scratch. Those August figures already sit below the 2.4 percent full-year pace the agency expects for 2026, suggesting the rate of grocery inflation was already cooling before the 2027 forecast was published.
Even so, the agency’s own published interval, -5.0 to 9.2 percent for 2027 food-at-home, is wide enough to cover outcomes from a modest grocery-price decline to an increase nearly five times the 1.8 percent midpoint. Treating 1.8 percent as a guaranteed number for household budgeting purposes goes further than the agency’s own forecast supports, since the same page that publishes the 1.8 percent estimate also publishes the range around it as part of the official forecast, not as a footnote.
What the Economic Research Service has published is a central estimate and an acknowledged range, updated as of September 25, 2026, not a locked-in figure for next year’s grocery bill. Whether the actual 2027 number lands near 1.8 percent, closer to the 2.4 percent pace of 2026, or somewhere else in the agency’s own wide interval remains, by the agency’s own accounting, an open question, and the agency has given no indication of when a narrower, more confident estimate for 2027 might replace this one.
A slower grocery forecast, not a lower one
USDA’s 1.8 percent food-at-home forecast for 2027 describes a slower rate of increase, not a drop in prices, and it says nothing about the property tax, heating or cooling costs that also draw down a fixed household budget over the same year.
The Senior Property Tax & Home-Cost Relief Kit lays out the circuit-breaker credit that includes renters and heating, cooling and home-repair help alongside an application log and renewal calendar for tracking those separate costs.
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This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
