Dinner food prices soared in 12 months by almost 5%, and why wouldn’t they? It’s not like people are just going to stop eating dinner, so why not hike up the prices??
The measure, defined by the Bureau of Labor Statistics as “total expenditures for food at grocery stores,” rose 4.8% during the 12 months ending in June. That’s up from a 4.4% annual increase from May’s report. Plus, not counting the temporary spike in inflation during the aftermath of the credit crisis, this is the biggest price increase by grocers since 2004.
“In our latest pricing surveys across discounters and supermarkets, we have seen a sharp increase in prices across channels,” said Stephen Grambling, Goldman Sachs retail analyst, in a note. Because of rising agriculture prices, “we remain concerned that food inflation could move beyond 5% year-over-year in the back-half, which may spark a more promotional environment and pressure margins.”
Some blame gas prices, some blame interest rates.
Either way or whatever the reason, the main thing here is what we said above: it’s not like we’re going to stop eating dinner, so we’re more likely to absorb the hike than to really buck the system. And because that’s the case — why wouldn’t they just gouge us?
Not cool. Hope we see some sort of drop soon.
[Image via AP Images.]