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Grocery prices will rise another 3% before the end of the year, according to one of America’s largest supermarkets.
Cincinnati-based Kroger generated $ 132 billion in revenue last year, but the company said inflation was longer than management expected, changing its pricing expectations.
Bosses now say they expect prices to rise 2-3 percent in the second half of this year.
It came as White House statistics last week revealed that a surge in meat prices is responsible for half of the increase in food prices in the home since December 2020.
Since December, prices for beef have increased 14 percent, pork by 12 percent and poultry by 6.6 percent.
Kroger “will pass the higher costs on to the customer where it makes sense,” CFO Gary Millerchip said during the company’s second quarter earnings call on Friday.
Management of Albertsons Companies – which operates 21 retail brands, including Albertsons, Jewel-Osco and Safeway – said 2020 revenue estimated at $ 70 billion and expressed similar concerns about the rising inflation in the second half of this year.
They also said that they should increase the prices of some of their products.
Additional prices on groceries would increase the pressure on consumers, as they already face the largest annual increase in consumer prices since August 2008.
According to the White House, beef, pork and poultry have accounted for half of the increase in home food prices since December 2020. Since then, beef prices have increased by 14%, pork by 12.1%. % and poultry 6.6. percent
Pictured: The annual increase in the sea freight rate increased significantly from January 2020 (less than 500) to January 2021 (placed at 2,500), making international trade in goods more difficult
The All-items Consumer Price Index (CPI), an economy-wide measure of inflation, rose 0.5% from June 2021 to July 2021 before seasonal adjustment, up 5.4% compared to July 2020.
The August CPI statistics are expected to be released this week.
The CPI for all food increased 0.7% from June 2021 to July 2021, and food prices were 3.4% higher than in July 2020.
The out-of-home foodservice CPI (restaurant shopping) rose 0.8% in July 2021 and was 4.6% higher than in July 2020.
The consumer home food price index rose 0.6% from June 2021 to July 2021, contributing to an annual increase of 2.7% so far in 2021.
Red meat, including beef, veal and pork, as well as poultry are the items that will be hit the hardest by the price hike, if they haven’t already.
Beef and veal prices increased 0.5% from June to July 2021, pork prices increased 2.2%; and poultry prices rose 1.9 percent.
The All-items Consumer Price Index (CPI), an economy-wide measure of inflation, rose 0.5% from June 2021 to July 2021 before seasonal adjustment, up 5.4% from July 2020. CPI statistics for August will be released this week
Beef prices are up 14 percent this year, while pork prices have jumped 12.1 percent and poultry prices are 6.6 percent higher.
These increases follow five consecutive months of price increases for all three categories. Prices have been pushed up by strong domestic and international demand, high feed costs and supply chain disruptions from the Covid pandemic.
Winter storms and drought impacted meat prices this spring, and processing facility closures due to cybersecurity attacks impacted beef and other meat production in May. .
Beef and veal prices are now expected to rise four to five percent in 2021.
Pork prices are expected to rise five to six percent, while poultry prices are expected to rise three to four percent.
Prices for the overall “meat” category are expected to increase between 3.5% and 4.5% for the remainder of 2021.
Of all the IPC home food categories tracked by the United States Department of Agriculture (USDA) Economic Research Service, the fresh fruit category experienced the largest relative price increase (4 , 9%) and the lowest fresh vegetable category (0.4%). compared to last year.
The United States Department of Agriculture (USDA) Economic Research Service reported that the fresh fruit category saw the largest relative price increase (4.9%) and the fresh vegetable category the lowest. (0.4%).
No food category has fallen in price in 2021 compared to 2020.
The Federal Reserve has said the many price increases that have occurred since the start of the pandemic are “transient” and those pressures will subside as supply chain disruptions and shortages are resolved.
However, the Biden administration said there were other reasons for inflation besides increased demand and supply chain issues.
The administration is singling out meat processors, expressing concern about “pandemic profits” and the lack of competition within the industry.
The International Monetary Fund has predicted the rise in food prices before the start of the pandemic, dating back to January 2018
Biden administration seeks solutions to stop fluctuating food and producer prices (pictured) by targeting the meat processing industry
“Only four large conglomerates control the majority of the market for each of these three products [beef, pork and poultry], and the data shows that these companies have increased their prices while generating record profits during the pandemic, ”National Economic Council director Brian Deese said at a press briefing on Wednesday.
The administration “is taking bold steps to enforce antitrust laws, boost competition in meat processing and stave off pandemic profits that hurt consumers, farmers and ranchers across the country,” Deese said.
It remains to be seen whether or not the administration’s efforts will contribute to a possible drop in prices.
In the meantime, customers are opting for private labels as a temporary and cost-effective solution.
“If you go back to an earlier time when you had inflation, the customer would often look to our brands as part of their budget structuring,” said Kroger CEO William McMullen. “We don’t see any budget changes on our brands at this point, but I’m sure inflation continues.”
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