Lael Brainard on Why Groceries Cost So Much

Lael Brainard on Why Groceries Cost So Much

Tariffs, shrinkflation, and a plan to save families $1,000

kyla scanlon

Oct 29, 2026

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Good morning from California!

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Something a bit different today! A special announcement and an interview with Lael Brainard on how to make groceries cost less.

1. Kai Ryssdal on Best of Luck! ☘️

Kai Ryssdal was once 34 years old, working at a bookstore in Palo Alto for $7 an hour in the middle of the dot-com boom, with no real plan as to what would happen next. He had worked in the Navy and the Foreign Service, and wasn’t really sure what to do or where to go. He is now the host of

Marketplace

(go listen if you don’t already!!) and has been explaining the economy to millions of people during its best times and its worst times. He is a light in the dark for many, including myself.

Best of Luck, my new interview show, launched on

Monday with Vox Media

. The goal of the show is to provide career advice for our ever changing, ever confusing economy. Most of the advice we give people comes from an economy that doesn’t exist anymore. So each week, I sit down with someone who built a career out of detours and second choices – economists, comedians, farmers – and we go through their story, do an advice autopsy on advice they’ve been given, ask them for some advice, do a mock job interview (like for a lighthouse keeper or Kermit the Frog), and a luck questionnaire. There is a lot we can’t control, but there is also a lot we can – and maybe we can make a little luck along the way.

Kai is

episode one

! I wanted to open with someone whose career looks inevitable from the outside, but in reality, the inside was full of detours and rejections, going forwards and backwards and forwards again. It’s a path filled with other people too, including his wife, Stephanie. We talked about whether a path like his is still possible, how you act on instinct when nothing is certain, how to measure the labor market, and when it’s time to leave a job.

Watch the episode on

YouTube

Episode one with Kai:

YouTube

·

Apple

·

Spotify

. New episodes Tuesdays. If you like it, a rating or a share is always helpful! I hope you love it.

2a. In Conversation with Lael Brainard about Grocery Affordability

I had the chance to sit down with Lael Brainard, former Vice Chair of the Federal Reserve and Director of the National Economic Council in the Biden White House. She now

chairs the Kitchen Table Project

, which does listening sessions in 12 communities, polls, and turns what they hear into proposals, like their recent grocery affordability report.

Affordability is “polling in a tier by itself” heading into the election, as one pollster put it to the

Washington Post

, especially as the affordability crisis continues to worsen. There are 46 House districts that will decide the control of Congress, and in 42 of them, incomes didn’t keep up with costs from 2019 to 2024. According to the Post’s analysis, median costs rose 33% and median incomes rose 28%. 6 in 10 households in these districts can’t cover a basic family budget.

A woman in Rockland County with a master’s degree, a “good job” at a hospital, a husband at an insurance company, and a cheap pandemic mortgage told them she’d started picking up Starbucks shifts to make groceries work, and said:

“I have, for a long time, felt like I must have done something wrong, because I didn’t think it was this hard for my parents… Where did I make a bad decision?”

In our highly individualistic society, broad, structural economic problems become the fault of the individual, when in reality, it’s the system, it’s the policy, it’s so many things that we just can’t control.

So the Kitchen Table Project is an answer to some of that. As Lael put it, groceries come up more than housing or healthcare when people describe what is causing them economic distress. Nearly every American shops at the grocery store at least monthly, and three-quarters shop weekly, so people are constantly having to deal with high prices at the store. Two-thirds of folks say grocery prices are

unfair -

so it’s not people just being like “oh man, stuff is expensive” it’s “things are expensive and they don’t have to be” which is important to understand.

People blame tariffs (83%) and the war (73%) for higher prices, according to Kitchen Table Project polling. 6 in 10 people are shopping at multiple stores to chase prices (and 7 in 10 parents). As Maria in Arizona pointed out, people are burning expensive gas to save on expensive groceries. That’s a huge double squeeze, and it doesn’t really show in the way we talk about economic data – lost time from the search, the low-grade feeling of being played, and of course, the general pain of persistently high prices.

The project has three proposals with an annual savings estimate for a family of four:

End the tariffs on food and food inputs, and make sure the savings actually reach the shelf.

Their number here is over

$320 a year

. Only one in nine people (11%) say prices have improved since some tariffs came off and 42% think prices actually got

worse

. Prices go up fast and come down slow (up like a rocket, down like a feather). The fix the Kitchen Table Project proposes is a “Fair Grocery Price Taskforce” that uses tools the government already has, so like the USDA already monitors prices, the FTC already investigates, plus a complaint portal where consumers can report if things are high and getting higher.

Honest prices via big, legible unit prices and mandatory shrinkflation labels.

Their number is over

$460 a year

. So this is an answer to shrinkflation. A peanut butter jar got smaller and the price either is the same or went up, so the Kitchen Table Project is saying that “hey, if you’re shrinking a product, you need to label it on the shelf.” If I’m comparing two jars of peanut butter, show me what a tablespoon costs in each, in a type font as large as the price. The suggested savings come from people switching products once they understand the price. Kenneth, in Virginia, from their listening sessions:

“I’m 75, retired from four different jobs so I can afford to retire. You know, the cupcakes are smaller, the price is more. It’s the little things… I thought I’d reached a place in my life where I could afford my cupcakes.”

And perhaps proper labeling and holding companies accountable for cheating customers is one way to make cupcakes more affordable.

An Affordable Groceries Partnership.

Their number here is over

$315 a year

. The government already buys enormous volumes of staples like milk, eggs, flour, cereal, for school lunches and military bases. The idea is to let participating private grocers buy off those same wholesale contracts that the government has and pass the purchasing savings through on a basket of staples that customers can buy, keeping only enough margin to cover costs. There is no subsidy and no government stores. I think you can think of it as a public-sector Costco Kirkland Signature.

The full conversation is below - enjoy!

The interview has been lightly edited for clarity.

What People are Saying About Groceries

Kyla:

Hey, Lael. Thanks so much for joining me today.

Lael Brainard:

I’m delighted to be talking with you Kyla.

Kyla

: So we are going to talk a bit about this work that you’ve been doing with the Kitchen Table Project, and this is something that I get asked quite a bit about, people really wondering why their groceries cost so much. You’ve been working with the Kitchen Table Project, talking to people across the country about grocery prices. What did you hear that surprised you while you were doing this work?

LB:

One of the things that maybe surprised some people was when we were talking to people about what they are really struggling with the big essentials came up, as you would expect. So housing and, healthcare are huge. But groceries were mentioned more frequently than anything else, along with the cost of trying to find low priced groceries when gas prices are high. When we surveyed people to see what those conversations looked like when it came to a representative survey, it turned out they were exactly right. Groceries were the top item mentioned by Americans. When we went further, we learned they are spending a huge amount of time in grocery stores. 99% of Americans shop once a month. And then 75% shop weekly which is, means they’re coming into contact with those high prices very frequently.

Tariffs, the War, Why Prices Won’t Come Down

Kyla:

And a lot of people are pointing towards tariffs or the war in Iran as a high driver of these high prices. Are they right about that? Is there a core force behind these higher grocery prices?

LB:

So I think tariffs and the war were mentioned a great deal by people both in our listening sessions and in the survey. Maria in Arizona, one person that we talked about put the two together for us. She was talking about how she is trying so hard to find low price groceries, and now, when she drives around from store to store which a large majority of people are doing, that is also expensive because gas prices are so high due, due to the war. So 83% of Americans said tariffs are contributing to high grocery prices. 73% saw the war as contributing. We know that grocery prices went up by about $320 because of the tariffs per year. And some of those prices even though tariffs are coming down, the prices of things like bananas and coffee haven’t come down, and we see that in our survey, too.

Kyla:

And that’s the first thing that you advocate for is that if we just ended tariffs on food and food inputs, and make sure the savings are passed through to consumers, it would save $320 for a family of four. So how did you get to that number? Is it just removing the tariffs and seeing that impact?

LB:

The first thing that we do advocate is that government should stop doing harm, and the easiest way to do that is to remove the tariffs. But it’s not enough. So when we asked people in our survey — “tariffs have been removed on some food items, are grocery prices reflecting that?”

Only 10%, said that they were seeing any effect in terms of lower prices at the stores.

40% actually thought that grocery prices had gotten even worse since those tariffs were removed.

So yes, we think there is a very strong case that consumers in the first few months could start saving $320, over the course of a year, but only if there’s also a mechanism to really monitor and make sure that companies are passing through those tariff reductions. Because as you know, retailers and companies tend to increase their prices when costs go up, but then very reluctant to lower them again when things like tariffs come back down.

Kyla:

And what would that mechanism of enforcement look like to make sure that the companies are passing on those savings?

LB:

What’s interesting about that is we already have the mechanisms in the government. We already have the ability to investigate at the FTC. We already have the ability to monitor prices and to see whether they’ve come down at USDA. So you could easily do an honest prices task force that wouldn’t cost any additional money. FTC could open a consumer complaints portal where people could say, “Hey, I’m not seeing the price of bananas coming down even though I know those tariff refunds have gone out.” And between USDA’s price monitoring and FTC’s ability to do investigations, that could really have some teeth.

Honest Prices: Unit Pricing and Shrinkflation

Kyla:

And then the next item on the list is unit pricing and shrinkflation labeling. So as products get smaller, companies tend to charge the same. So you have labeling saving people $460 a year. So how does this policy item work? How can proper labeling save people some money?

LB:

Another thing that’s enormously popular with consumers when we surveyed them is unit prices labels when packages are shrinking and the price is not shrinking with it which we refer to here as shrinkflation. Consumers being able to feel like they can actually compare two products on a shelf and get a sense for whether the actual spoonful of peanut butter is going to cost less or more depending on the size of the package, and whether that spoonful of peanut butter has actually gotten more expensive over the last year because now there’s a big indentation at the bottom of the peanut butter jar.

So there’s actually less content for the same price. That’s what shrinkflation looks like, and we see it all over in packaged goods in particular. What we know is that consumers are really very actively trying to manage their grocery costs. We saw that in our survey. Three-quarters driving from store to store shopping very carefully for the best value.

But right now they feel like they’re being ripped off because so many of those products are deceptive, and they can’t find unit labels. So very straightforward.

Require at the national level that you could see what the price of a tablespoon full of peanut butter is in each jar, just as big as the actual price of the jar.

And then, if you’ve shrunk the jar, you should just come clean.

That’s what we refer to as honest prices. Also looking forward, honest prices would mean not engaging in surveillance pricing. The kinds of games that corporations can play when they know that if a parent is coming into the store at midnight to get some baby Tylenol, they’re likely to be willing to pay more for that. That is probably in the future. And so just starting right now with honest price requirements would save $460 per family per year. That’s a lot for American families.

Kyla:

And is that coming from them switching products? How does that savings come about?

LB:

There’s a lot of actual behavioral research that consumers do switch products. And that they look for the cheapest product and that saves them a lot of money. Our estimate’s actually only about 3% savings, but the behavioral research has estimates that are 5 to 15% savings. And we know that Americans are really actively looking because they said that in our survey. And we know they’re pissed off about shrinkflation. There is a gentleman in Virginia Beach named Kenneth. He said, “You know, I’ve worked hard all my life. I’m a retiree. I had four jobs. I think I deserve to have cupcakes that don’t shrink.” He really I think captured what a lot of people are feeling, which is just be honest and let me make the decision on the basis of honest prices whether I’m going to pay that premium. And strong support again — close to 90% support in our survey for that. $460 is a lot of money for a family of four to save on groceries each year.

Spending isn’t the Same Thing as Sentiment

Kyla:

I definitely want to keep talking about the policy and get to the third solution that you have. But I think this is so interesting because often when we talk about negative consumer sentiment, which is something that we’ve been experiencing pretty intensely — consumer sentiment is near all-time lows, people will point to spending and be like, “Well, look, people are still spending money.” But I think we can see in the survey that you all created, they’re still spending money, but they’re not happy about the way that they’re being forced to spend money. Do you feel like this is contributing? It’s hard to draw a causal relationship, but do you feel like this is contributing to some of the negative consumer sentiment that we’ve been seeing?

LB:

I think that we saw it certainly in our surveys, and we heard it in the people we talked to in 12 different communities around the country. People feel like there are these kind of tricks and games that are going on which cost them time and money. And what I mean by that is again the large majority of Americans are actually finding the prices when they’re in the store. A large majority shop in grocery stores personally, and they don’t want to have to take a magnifying glass to the grocery store with them to try to figure out what the unit price is, and they don’t want to have to do mental math to figure out whether a product has shrunk. And it puts them in a bad mood because they feel like it is dishonest, it’s deceptive. And so an honest price requirement is pretty straightforward. And again, you can use the same task force to just make sure that stores are actually following through with it.

The Affordable Groceries Partnership

Kyla:

And the third policy solution is an affordable groceries partnership. So the government would use its buying power to negotiate a low-cost basket available at participating stores, and this would save consumers potentially $315 a year. So how does that work? Is the government subsidizing these things from the grocery stores? Are suppliers subsidizing it?

LB:

So one of the things that we try to do in our work is come up with solutions that would deliver relief but would not add to the fiscal burden, because there is already large amounts of fiscal spending and taxes have gone down, so we’ve got bigger deficits.

So we try to look for solutions that have no fiscal cost. In this case, no subsidy. We already have a large amount of purchasing power on the part of both the Department of Agriculture and the Department of Defense both of which do just commercial bids for grocery staples. In the case of the Agriculture Department, they’re doing that for things like school lunch programs, and in the case of the Department of Defense for veterans and military bases and things like that.

So why not use that purchasing power of the government, but then work through private stores? So what we heard from consumers in our surveys is they really like the idea of having a set of staples that they could rely on to be low cost, but they didn’t want to do that through government stores. They wanted to do it through the private sector, and that is what our proposal, the Affordable Groceries Partnership, really tries to do.

It uses the purchasing power of the US government to get better wholesale prices that then are made available to private stores on the agreement that for those staples. Then they would passed the savings to consumers, keep only enough of a margin to cover their own cost. But that would give consumers an option for a low-cost, basket of groceries, and they would know that they could always go to a grocer that had joined the Affordable Groceries Partnership and be able to get at least those staples at a reasonable price.

Now, of course, the national chains already have a lot of purchasing power and can get those volume discounts. Smaller grocers just can’t do that. Grocers maybe in less populated areas, in rural areas can’t do that. We just don’t know when the national chains are actually passing those cost savings on to consumers and when they’re keeping them in their margins. So this would just be creating a competitive option.

Kyla:

And there’s a worry that when the government would buy a basket of food, that maybe it would be cheap calories that enter that basket. And one thing that I found really interesting about your poll is that parents specifically who are having tremendously hard time with grocery prices really want a healthy food. They want something that is good for their kids, good for themselves. So how do you prevent this affordable groceries partnership from being just a cheap calorie basket?

LB:

So I think what we see already is that the government procures, or uses its purchasing power to get good wholesale cost for staples, just the basics like milk and eggs and flour and cereals that are healthy and canned foods and frozen foods and fresh foods that are all healthy.

So that already happens. And again, people are looking for a basket of staples. They’re not looking for you know, the government to create new products. So we see that happening today in programs around the country, and this is just extending that purchasing power to make it more available to any participating grocer really that wants to stock those items on their shelves and give consumers a reliably low cost generic type of option.

Affordability Doomerism

Kyla:

What do you think about that term, affordability, as a descriptor of what consumers and people are experiencing right now? And do you feel like this can address some of the problems of affordability?

LB:

Look, this election is going to be partly I think about the affordability crisis that people thought they were electing representatives who were going to go to Washington and bring their prices down back in 2024, and instead what they saw was that prices have actually gone up in part because of government policies like tariffs on food and the war that’s raising diesel prices, and food packaging costs and therefore making food prices higher as it also is making gas higher.

So I think if we see a lot of candidates that are coming to Washington because voters expect them to actually make the essentials more affordable, they’re going to want to have some action items that can deliver, and that’s what we saw in our survey. We asked, “Do you want immediate relief now? Do you want to wait to fix the problems for good even if it means waiting?” Large majority said, “We need savings now. We don’t want to do things that are going to make things worse in the future, but we cannot wait.” And so I think there is an imperative or is likely to be an imperative to deliver some short-term relief.

There’s critiques out there that say… I call it affordability doomerism. Like, ugh, the only way that consumers are going to feel better is if you actually bring the whole price level across the economy down, which only happens during recessions.

Well, of course, that’s not a good solution for consumers, but they’re not asking that everything actually get lower in price. They’re asking that the essentials, groceries, stop rising by as much. They would like to see housing not rise by as much, and healthcare with more control, more predictability, less of these surprise out-of-pocket costs.

So what we believe is that you can actually create some policies like the $1,000 of savings for a family of four which is a lot on a basket of groceries that may cost about $15,000 a year. By doing things that take away bad government policies and enforce actual honest pricing on the part of corporations, which brings in some competition, and uses some of the government’s ability to procure things its purchasing power kind of at scale to just get better wholesale costs but then continue working through the private sector.

So we do believe that there’s going to be an expectation for some short-term relief, and we want to make sure that that is done in ways that don’t make the problem worse, and that introduce competition and don’t raise fiscal costs. And that’s the kind of solution that we have in groceries, housing, and healthcare.

And we hope some people will, once they’re elected, see these as good short-term relief measures.

Can the Government Actually Do This?

Kyla:

And I thought the poll was interesting, too, because it pointed out that 77% of shoppers are pretty worried about food safety and foodborne illness. And so it seems like there’s a lot of concern about government capacity in general, like the government isn’t going to be able to protect people, they’re not going to be able to make sure the food is quality, and there’s also all of these concerns about affordability. I mean, how do you connect those two things in your mind, this concern about government capacity, and then having the government intervene and help with affordability like this?

LB:

So I think what is interesting is you can connect the dots. I mean, DOGE had massive cuts at the Department of Agriculture, including food safety inspectors. We have the new world screwworm affecting cattle herds and imports, at the same time, when we’re hearing from parents in particular, as you said Kyla, but also generally from Americans saying, “No, no, no, we want more food safety, not less.” So I think going back and revisiting, if you look, I think there was a recent Gallup poll that said that overwhelming majorities of Americans actually believe that the federal government, not just state and local, but federal government has a lot of capacity and should do more.

[KYLA NOTE: Here is what the

Gallup

poll said]

Americans’ confidence in the federal government’s ability to improve their lives dropped sharply in 2026. Forty-three percent of U.S. adults say the federal government is effective at making a positive impact on people’s lives, down eight percentage points from 51% in 2025. The decline in perceived effectiveness has not shaken Americans’ belief in what the government could accomplish. Ninety-two percent of U.S. adults say the federal government has some or a great deal of power to make a positive impact on people’s lives, essentially unchanged from prior years and on par with state and local government (93%) and businesses (88%).

They just think that the federal government is falling short on actually delivering that value right now. And of course, those cuts are part of that story. So we think that the government can be part of the solution, again, not big fiscal costs, but through enforcing more competition, more honest pricing. Yes, more food safety inspectors. That’s good for the farm sector, and it’s also good for consumers.

Kyla:

This will be my final question but for these policies to work, people said that they would want to see $500 in savings. So out of the three, in order for it to add up to 500, is there one or two that you think could accomplish that 500 if we’re not able to get to all three?

LB:

Yeah. Look, I think that the quick fixes are very straightforward. Get rid of the tariffs on food and food inputs, Require honest pricing, unit prices that are big and easy to read, shrinkflation labels. We already have the mechanisms, but tell a task force to actually monitor the honest prices and the tariff pass-through, and that right there is already well in excess of $700. Then put in place an affordable groceries partnership between the private sector, piggybacking on that wholesale cost reduction from the purchasing power of the federal government. You can get well above $1,000. We think that do the tariff removal and the honest prices right up front with a task force that monitors it, and you’ll already see over $750 that consumers will see within months.

2b. Some Takeaways

So that’s how they get to $1,000 a year or so in savings. Honest pricing makes a lot of sense to me, as does “don’t do bad and harmful things like broad-based tariffs.” I worry about the incentives for grocery stores to partner with the government - I just don’t know if they will, but it would be a good thing to try.

But broadly speaking, I find this to be a pointed effort to give people a voice during a time when they don’t feel heard. There’s a bigger point in this too as I talked about with Lael - people will say that consumers are fine because spending is up. The Kitchen Table Project is an excellent example of how spending isn’t always happiness or being “fine”.

People are spending, they’re angry about how they’re being made to spend. Driving to a second or third store, squinting at labels, looking at their older, bigger peanut butter jar next to their little peanut butter jar with a huge indent in the bottom isn’t really a recipe for happiness.

Albert Hirschman wrote

Exit, Voice, and Loyalty

in 1970 and he made the point that when something you depend on gets worse (a product or the government or a company, anything) you have two moves pretty much. You can leave (exit) or you can complain (voice). Economists, he said, only really study exit because that’s what competition is! If you don’t like the price, you shop somewhere else and the market sorts itself out accordingly. Voice is the political thing and it’s messy and hard to measure.

If you read the grocery survey through that lens, it’s the portrait of a country trying to exit with nowhere to go. Driving to a second store or buying generic is an exit of sorts, and now people don’t really know what to do, understandably. The Kitchen Table Project is an attempt to fix the voice channel, in a way. The complaint portal is voice. The unit price and shrinkflation labels are what make an exit informed. The Affordable Groceries Partnership is an exit option too. People have been trying to solve all of this by themselves, in the ways available to them, and this is a proposal that attempts to make a few more ways available to people during this time of uncertainty.

3. A Correction

I was on a show (that comes out on Sunday - I’ll link it here when it does) and the host of that show kindly corrected me - he pointed out that I had misquoted Raymond Williams. I paraphrased something in

The Ozempicization of the Economy

,

writing that Raymond Williams had said

“to be truly radical is to make hope possible rather than despair convincing.”

The wrong quote is widely

circulated

, but it’s absolutely not his sentence. What Williams wrote in

“The Politics of Nuclear Disarmament”

(1980), was:

To build peace, now more than ever, it is necessary to build more than peace. To refuse nuclear weapons, we have to refuse much more than nuclear weapons. Unless the refusals can be connected with such building, unless protest can be connected with and surpassed by significant practical construction, our strength will remain insufficient.

It is then in making hope practical, rather than despair convincing, that we must resume and change and extend our campaigns.

Very sorry about that. The real one is much better anyway.

4. Other Things

I’ve been going on a few shows and have been having a lot of fun!

I joined Aziz Sunderji and Prof G on the

Prof G Pod

to talk about housing. Aziz runs

Home Economics

and provided such thoughtful and insightful analysis.

I joined Nayeema on

Smart Girl Dumb Questions

I joined Carlo on

Newsweek 1600

I joined Ben and Emil on the terrific

Ben and Emil Show

This is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Thanks for reading!

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