Posted on 07/15/2023 11:00:15 AM PDT by EBH
Potential Drivers of the Behavioral Shift Connolly speculated that consumers’ desire to stretch their overall budgets might be driving the “hunkering down” behavior. In June, the Consumer Price Index indicated a 0.1% increase in the overall price of food compared to May, with a 5.7% rise over the previous 12 months. Food prices for home consumption remained steady month-over-month but increased by 4.7% in the past year, as reported by the Bureau of Labor Statistics.
Additionally, Connolly proposed that the current summer, compared to the less travel-intensive summer of 2022, could contribute to the observed changes in consumer behavior. Memorial Day and Fourth of July holidays were predicted to involve significant travel, with AAA estimating 45 million and 50.7 million people, respectively.
Outlook for Conagra Brands and Identifying Headwinds Connolly acknowledged that the company considers this behavioral shift a likely temporary change. Nonetheless, Conagra Brands has factored it in as a near-term challenge in their business outlook. Connolly also mentioned a limited deflationary impact on certain “single ingredient” brands, necessitating price adjustments.
For fiscal year 2024, Conagra Brands expects organic net sales to increase by approximately 1% compared to the previous year. Connolly expressed optimism that fiscal 2024 will bring a transition toward a more normalized operating environment for the company.
Conagra Brands, headquartered in Chicago, reported a year-over-year net sales increase of over 2% in the fourth quarter, reaching $2.97 billion. However, quarterly net income declined to $37.5 million, compared to $158.9 million during the same period of the previous year.
Some of the well-known brands in Conagra’s portfolio include Marie Callendar’s, Swiss Miss, Orville Redenbacher’s, Slim Jim, Healthy Choice, and Gardein.
consumers switching to the cheapest possible foods doesn’t seem consistent with the White House claims of “the strongest economy in history”.
Temporary?
Somehow I doubt it.
Banquet which is the lowest end brand of Conagra I can think of has skyrocketed over the years in price
For example a box of frozen fried chicken has shrunk to thr point where it might have 5 or 6 pieces at most in it, but is retailing for nearly $15 now… pot pies are now closing in on $2 each….
The frozen meals have gotten cheaper and cheaper made and price just up through the roof.
I don’t think you are seeing a “temporary” shift.
Campbell’s is having the same problem, constant price raises on low end products.
These things have gone from affordable staples to grossly overpriced items in terms of value proposition.
Can actually buy KFC at a cheaper per piece price than banquet.
I have a small pension from Conagra.
I agree with you. And the quality has deteriorated. The “portion” sizes are smaller. Between the cost and the fact that the food is not even tasty or satisfying, why buy it?
Even the cans of soup are now over $3 each, with enough for one person for lunch.
Having been in the meat business for over 40 years, they have been a competitor of mine a good bit of that time.
They're nuts. Prices are radically going up every month. The Bureau uses fake stats, focusing on some foods and ignoring others in their calculations in order to minimize inflation's effect on escalating prices.
Customers are alarmed at higher prices that they can't afford, smaller packaging but higher prices. The government is lying to all of us.
The problem is inflation. The price gap between buying ready made meals and preparing your own is bigger than ever.
It’s more than just that. Inflation was far higher when I was a kid, but never was banquet or cambells out of the realm they were staples… this is something. More
Snacks and prepared foods not ingredients.
Also stuff that you can find in store brand which is cheaper.
Maybe not quite as good but acceptable quality.
I was in IT so not much involved with the product side.
Well with a net drop of over 100 million, one would think something would change?
People are clearly showing they cannot afford even basics type goods.
The result of Biden's lunacy is an automatic increase in prices for the "cheaper" brands.
Guess who pockets the increased cost? It's the same mentality that helped propel Elon Musk into richest man in the world status by subsidizing his EV's.
Tesla: Price is $80K (including the subsidy). It's not much if you say it fast.
Salesman: You're only paying $60K because you'll receive $10K tax subsidy...Guess who got the $10K when the check cleared?
George Carlin: "It's a big club and you ain't in it".
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