Posted on 11/22/2022 2:22:35 PM PST by nickcarraway
Critics claim food companies and restaurants are taking advantage of inflation to raise prices higher and higher.
If you’ve been grocery shopping lately, you’ve probably noticed markedly higher prices on items like bread, milk, and eggs. It’s been widely reported that inflation has driven up prices, and the Bureau of Labor Statistics’ food index, a measure of price changes in grocery stores and restaurants, increased 11.2% year over year last month.
But a new New York Times report says some food companies may be raising prices higher than inflation calls for—just because they can. “Corporations have used inflation, the pandemic, and supply chain challenges as an excuse to exaggerate their own costs and then nickel-and-dime consumers,” Kyle Herrig, president of watchdog organization Accountable.us, alleged to the Times.
Facing erratic food costs, staffing shortages, and evolving safety regulations in recent years, grocery stores and restaurants saw very real rising costs, which they passed on to their consumers. Now some food companies have been able to cover their inflation-based costs and continue to raise prices. Jason English, an analyst at Goldman Sachs, noted on a call with other analysts this summer that Conagra Brands, owner of brands like Slim Jim and Duncan Hines, has both priced its products above inflation rates and recovered its profit margins. Chipotle has increased prices twice this year, while taking in approximately 13% more revenue year over year. (Conagra and Chipotle did not respond to the Times's request for comment.) Grocery prices across the country have skyrocketed 13% over the past 12 months, according to the Bureau of Labor Statistics, exceeding the national rate of inflation at 8.2% as of September.
Certainly, consumers feeling the squeeze in their wallet are switching to cheaper options where they can. But many people seem to have begrudgingly accepted the price hikes, allowing the companies to continue to make record profits. According to the Times piece, James Quincey, Coca-Cola’s CEO, said on a call with investors that sales were strong, even during these tough financial times. “In the face of these pressures, consumers stayed resilient.” Rick Cardenas, CEO of Darden Restaurants, the company behind Olive Garden and Cheddar, said on a call with analysts, “We are seeing strength with guests in higher income households.”
It seems as if these price hikes may increase until executives finally find consumers’ breaking point. But when it comes to necessities like food, where exactly is that breaking point? As Sharon Zackfia, group head of consumer research at investment bank William Blair and company told the New York Times, “In the long arc of history, most restaurants do not lower prices.” Alas, it seems in the tug of war between Big Food and the regular joe trying to treat himself with extra guac, joe loses out. Until executives across the food industry have a change of heart, I suppose I’ll see you at the farmers market.
Fast food joints seem to be ripping off big time.
“cut all the corporatism-fascism” by not allowing themselves to be extorted by BLM and the Climate Idiots.
One thing they could cut waaaay back on is the elaborate and wasteful packaging.
And pass the savings on to the customer.
Aldi’s does this
Same
That was brilliant!! :)
I would consider that the inflation number is what is artificially low.
Thanks to Brandon my family is having squirrel with acorn soup along with baked possum for Thanksgiving dinner.
My first accounting teacher used to say:
A business should be run like a one story cat house - no f’n over head.
“lower your overhead”
Some of the old-timers used the word “nut” instead of “overhead”.
“I need to make my nut” to stay in business.
You could have had a lot of fun with that.
;-)
A loaf of bread for less than a dollar? What kind of bread, is the question.
I stopped buying “store” bread - because they were clearly using the cheapest flour they could find. Forget trying to spread peanut butter on it without it disintegrating, or even soft butter. The last straw for me, a slice of store bought bread broke completely in half - under its own weight. LOL.
A 5 pound bag of good bread flour retails for about $5, and makes about 10 loaves of good french bread.
Bon Appetit went woke and hard left.
Thanks for posting this reality of business in America not communist country with one option if your are lucky.
“Every purchase is a reverse valuation: you value the product more than your money, and the seller values your money more than the product. If the product costs more than you value it, you don’t buy it, and the seller decides either to keep the product or offer it at a lower price.”
In America, no store nor any corporation has a gun aimed at your private parts forcing you to buy anything.
If their price is too high, just don’t buy it. Just buy something else or do without the item.
Each Monday our smaller version of a bigger chain grocery store has a Monday Sale on a lot of their brand of canned goods. So my wife puts a buy on my list and an estimate of how many cans of each item to buy. So we, have been loading up on good store brands and sometimes brand name products.
Our last two monthly Costco orders with a 2 hour delivery time after last item is ordered online, has been high in items where there were shortages during the Covid B$.
We are going to one of our son’s home for Thanksgiving dinner. He got tired of only 1 turkey and being frozen B$. He ordered a pre sliced ham.
There are no fresh cranberries for my specialty, and I just bought a couple of cans of cranberries.
I paid $2.23 a can but I just looked on amazon and the same is $3.00 a can.
Gibberish. No one needs to dine out at all, when they can cook cheaply at home. If you want “extra guac” buy an avocado and make your own. Corporations charge what the traffic will bear. It’s called free market economics, and no one is forcing people to buy anything from them.
I love farmers markets, but you have to be discriminating. Some produce, like late season hard squash tend to be bargains. Others like local honey, not so much. So no they are not reliably cut rate prices, but then again, you get really good fresh locally produced goods that have been ripened on the vine, not in a warehouse somewhere between here and california.
Have you priced avocados recently?
And You’re leaving the lead shot in the Squirrel to make it a heavier meal.🤪
“. But many people seem to have begrudgingly accepted the price hikes, allowing the companies to continue to make record profits. According to the Times piece, James Quincey, Coca-Cola’s CEO, said ...”
And guess who those pockets full congress-people are.
I bought some at Walmart last week for 68 cents each. I just checked the current price online - 58 cents now.
Avocado prices do tend to vary more than apples (which have gone way up recently) and bananas (pretty stable).
It is far easier that they think to figure this out. We have all been lied to and the cost of inflation is much higher than what we have been told. If they use flawed Biden data all of their results will be wrong. Check any item you want at the grocery store and see if it matches the OFFICIAL rate of inflation. Then check the price of fuel, or about anything else you want. None of it matches what Biden is telling us. Maybe they need to look harder at the real reason that the cost of dining doesn’t match.
Here’s something I’ve noticed at the local Walmart...store brand products selling for the same as name brand (in the same quantity. Not a lot of this is happening, but I would think it might slow slow consumption of the store brand products. Also, I am seeing shelf pricing differing from the checkout price. They are probably slow on getting shelf prices updated, but it is certainly consumer deception. Sometimes this has happened weeks in a row. Looks like possibly a store manager problem or maybe it is being deliberately done.
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