Posted on 03/31/2011 9:33:59 AM PDT by blam
Wal-Mart CEO Warns Of Serious Inflation In The Coming Months
March 31,2011
U.S. consumers face "serious" inflation in the months ahead for clothing, food and other products, the head of Wal-Mart's U.S. operations warned Wednesday.
The world's largest retailer is working with suppliers to minimize the effect of cost increases and believes its low-cost business model will position it better than its competitors.
Still, inflation is "going to be serious," Wal-Mart U.S. CEO Bill Simon said during a meeting with USA TODAY's editorial board. "We're seeing cost increases starting to come through at a pretty rapid rate."
Along with steep increases in raw material costs, John Long, a retail strategist at Kurt Salmon, says labor costs in China and fuel costs for transportation are weighing heavily on retailers. He predicts prices will start increasing at all retailers in June.
"Every single retailer has and is paying more for the items they sell, and retailers will be passing some of these costs along," Long says. "Except for fuel costs, U.S. consumers haven't seen much in the way of inflation for almost a decade, so a broad-based increase in prices will be unprecedented in recent memory."
Consumer prices — or the consumer price index — rose 0.5% in February, the most since mid-2009, largely because of surging food and gasoline prices. Core inflation, which excludes volatile food and energy costs, rose a more modest 0.2%, though that still exceeded estimates.
The scenario hits Wal-Mart as it is trying to return to the low across-the-board prices it became famous for. Some prices rose as the company paid for costly store renovations.
"We're in a position to use scale to hold prices lower longer ... even in an inflationary environment," Simon says. "We will have the lowest prices in the market."
Major retailers such as Wal-Mart are the best positioned to mitigate some cost increases, Long says. Wal-Mart, for example, could have "access to any factory in any country around the globe" to mitigate the effect of inflation in the U.S., Long says.
Still, "it's certainly going to have an impact," Long says. "No retailer is going to be able to wish this new cost reality away. They're not going to be able to insulate the consumer 100%."
DRILL BABY, DRILL!!!!
And see tag line from the last time gas was this high.
But it would be nice if the CEO mentioned how democrat politicians are holding the world’s economy hostage. I guess democrats buy cheap junk too though.
Today’s USDA crop forecast that reduced the amount of corn available in storage and downgraded the prospective acres that will be planted this spring did not help. Prices on food and fiber will keep going up, much of it because of the punishing oil prices that figure into processing and transportation of everything we buy.
Thank you, Obama, for blocking oil drilling in the USA and putting us into this terrible situation. There definitely will be a “double dip” in the economy, as people have to watch every nickle just to buy gas and groceries.
Wait until companies see that decision hit their quarterly earnings statement. THAT'S when things will get bad.
The Market is still burning through QE2, all that money needs to go somewhere. I thought that we might get a market correction out of this mess in Japan, guess not. All we got was a speedbump.
Hope and Change.....
Inflation is “going to be serious” = CHANGE
Inflation has been going on for more than a few months now.
Has anyone looked at toilet paper, shorter width on the roll? Or a can of tuna or how much water is in a can of corn? You don’t even get an ear of corn in one can.
The list, ping
Let me know if you would like to be on or off the ping list
Corn is up 30% today even though this year we planted the second most acres sense the 1940's. 40% going for gas. China and Japan exports of corn the highest.
Cotton planted acres is up 15% from last year and yet prices are the highest sense the civil war blockade of cotton.
Experts is it the Dollar or the middle class of China and India growing?
We only pay a fraction of what the average Urban people pay for food. We also buy bulk at Sam's Club and buy in large lots at a discount. All a person needs to have to buy like this, is the discipline to save ahead, monitor prices closely and buy the lowest price and have a food storage room about 8x12 feet with a large chest style Freezer. (Chest style uses only a fraction of the electricity that an upright does.)
I have a friend who owns a trucking brokerage company. She said the average price of loads has gone from $2,000 to $5,000 within the last six weeks. Gas prices have been the only change.
Between the huge debt run-up AND the so called “quantitative easing” i.e. printing huge amounts of money, the value of each dollar will go down, buying less.
Prices are going to be going WAY up. Food prices especially, given the ethanol subsidies, where more land is used to grow corn for ethanol than other crops, and oil costs (transportation, as well as fertilizer & other farming costs).
Mark
This must be that inflation that the Barry nursery said would never happen. ...Time to start buying in bulk. Actually, that time was when it was obvious Barry was going to beat the geriatric blunder. Now it’s time to redouble our efforts.
Coupon Whisper
http://www.freerepublic.com/focus/f-bloggers/2697233/posts
You can save at least 50% on your grocery bills.
Print your own coupons...they do work, as I’ve used them, at Kroger’s, Walgreens, and the Navy Commissary. They let you know when you have reached your limit...you can usually do 2-4 coupons of any one you choose...have to do them in different printings...3 to the page.
http://print.coupons.com/couponweb/Offers.aspx?pid=13903&nid=10&zid=xh20
Since I completely ‘battened down my hatches’ starting last spring, I have pretty much cleaned out my freezers by planning meals around what was in there (two uprights) and to make way for venison and some pork and chicken this late summer into fall, plus garden produce. This year’s garden is all about production, Baby! :)
My FIL will be growing out the squash for all of us this year, as he always does. Butternut (Canisi), A Buttercup-type (Mooregold) and Delicata winter squashes this season.
I’m pretty cheap to feed now that it’s just me and I’m not responsible for feeding five men, too! :) (Of course my boys always manage to show up for a visit around supper time...)
Articles like this one always make me check and double check my stash!
Here’s an easy grocery budget to follow for any lukers that may be just getting on the bandwagon:
A $10 Grocery List, with ideas of what to do with the items, too! Might be fun just to do a dry run of this every few weeks to get in the habit:
http://www.budget101.com/household/dirt-cheap-groceries-14.html
I heard Hannity say that same thing.
A few months? He has not been paying attention.
Case in point: 5 oz. cans of tuna, were six.
It has been a couple of years, or more, that companies have steadily been putting less in the box.
.75 gal of 6% Sodium Hypochlorite (Bleach) is less bleach than 1 gal of 5% solution, but they can call it Ultra and charge more.
Cheezits are now 13.75 oz in a box (were a pound). Price was the same for a while, but steadily edging up.
Toilet paper - scott rolls were .50 ea, now .75.
I demonstrated to a WM cashier that numerous items in my cart were cheaper per oz in the smaller container than the larger, and he was shocked (but I thought...I was taught...).
Hadn’t caught the skinnier roll yet. But a lot of things are way smaller.
Inflation hedge is to get staples now (my tuna has increased 50-100%, is storable, and small enough to trade). Rotate through as long as you can afford to do so, then live off the stores (if your replacement stores are big enough to actually use).
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