According to the Wall Street Journal, food prices have risen to historical highs because of inflation. Grocery stores aren’t offering relief for American customers as they have been offering fewer discounts ever since the pandemic.
Jim Hertel, an executive from a market research company, says that food producers support retailers by offering discounted prices. This allows grocery stores to offer lower prices for consumers.
Food producers are now faced with rising manufacturing costs, increased labor costs, drought, flooding, and diseases. They are therefore forced to raise their prices and have less ability to offer discounts.
Groceries, which already pay more to producers, are then responsible for offering discounts to customers.
Retailers are now offering lower prices than before 2019.
The Journal:
According to Information Resources Inc., 20% of food and drink products were sold in the third quarter with price reductions, compared to 25% in the same period last year. Data show that promotions levels have dropped from the 2019 levels for all categories of grocery except meat.
A general manager at a Chicago-based grocery store claims that he has been unable to offer yogurt and milk at a discount for five months.
Albertson Cos. operates Safeway and Jewel-Osco. They do not expect to offer discounts on products during the year.
Grocers are continuing to promote cost-saving deals and there is concern about consumer demand.
Skogen’s Foodliner Inc. noted that they have been investing 15% more in discounts than last year, but still struggle to bring in enough customers.
Breitbart News reported that recent government data showed the highest food inflation since 1979. Grocery store prices have risen 13.5 percent from last year and overall food prices have risen 12.4 percent.
