The possibility of finding a sign of relief in the bills that consumers cover during their visits to grocery stores is still very distant, since according to estimates by various financial experts, prices will continue to rise in the rest of the year and perhaps during the next.
According to government figures, in August the highest annual increase in the cost of groceries was presented, as they rose by 13.5% with respect to 2021, which also represented the most significant increase recorded since 1979.
Although for the next year expects the rate of food inflation to moderate, that does not mean that their prices will go down, because once they reach a certain level, they tend to stay there or go up, but they rarely go down.
Government data shows that since 1974 until 2021, food prices only fell for two years.
In contrast, every two years there were increases, although in some years the increase was very slight and consumers may not have noticed it because their wages kept pace with the increases, which is currently not the case.
In this regard, grocery producers They argue that they are paying higher prices for labor and packaging materials. In addition to that they also blame extreme weather, such as drought or floods, and diseases, such as avian flu.
However, consumers have to eat and are therefore willing to pay higher prices for groceries.
For his part, Dirk Van de Put, CEO of Mondelez (MDLZ) said in a conference call with several media outlets that short-term inflation is expected to remain high.
Therefore, the manufacturer of Oreo and Ritz said that, given the high cost of energy, transportation, packaging and raw materials, the company it represents will implement price increases to compensate for said costs.
Jeff Harmening, CEO of General Mills (GIS), was in the same line of strategy, who expects his costs to increase between 13% and a 15% for the fiscal year 2023, before which the company that manufactures everything from Cheerios to Blue Buffalo pet food will also raise the prices of its products to for its retail customers, as it was detected that consumers accepted price increases this year more than expected.
You may also be interested in:
– Rent for single-family homes falls for the third consecutive month in the US
– Millennials and Generation Z, those who suffer the most from the increase in rents in the US according to Redfin2023-What are the 10 most expensive cities to rent an apartment in the US? USA, according to Realtor