According to the largest U.S. supermarket by sales, the prices of groceries are going to increase higher this year, as inflation is running higher than anticipated.
Kroger: the inflation of goods went higher than they anticipated
The Kroger Company is a Cincinnati-based grocery store that had $132 billion in sales last year. They also stated that the inflation of goods is going higher than their management anticipated. Now, they are predicting that the prices of goods will rise more up to 2% – 3% during the second half this year.
Kroger says inflation is running hotter than they anticipated and expect grocery prices to RISE 2% to 3% over the second half of this year!
Kroger is "passing along higher cost to the customer where it makes sense to do so," said CFO Gary Millerchip https://t.co/nrMLEPJiew
— PARIS (@PARISDENNARD) September 12, 2021
According to the Chief Finance Officer of Kroger, Gary Millerchip, the company is transferring the more expensive cost of goods to the consumers where it is reasonable to do so.
On the other hand, Albertsons Companies, the rival of Kroger, expressed the same sentiments. Albertsons says that inflation will go higher during the second half of 2021 and they will likewise pass the increased costs onto their customers. According to the recent price index, the food at home has already increased for six consecutive months by up to 2.6% in the year 2021.
Half of the price increases for groceries at home are because of the rising costs of poultry, pork, and beef. For instance, the prices of beef have increased by 14% this year and the prices of pork had a 12.1% jump. The prices of poultry have likewise risen by up to 6.6%.
Biden blames the pandemic and lack of competition for the increase in prices
On the other hand, the Biden administration is insisting that all of these issues are due to the coronavirus pandemic and heightened demand for food. The administration also blames the increase in meat prices on the absence of competition in the field of meat processing.
Have you noticed that your grocery shopping prices are soaring? You're not alone… https://t.co/sVSOHDJ9T5
— Breitbart News (@BreitbartNews) September 12, 2021
In a press briefing on Wednesday, Brian Deese, the National Economic Council Director, noted there are only four large businesses that are in control of the three major meat products: poultry, pork, and beef. The data likewise shows that these groups have been increasing the prices while making record-high profits throughout the pandemic.
Deese added that the Biden administration is taking brazen action in enforcing antitrust laws in order to increase the competition in the processing of meat; these laws are furthermore designed to step back on the profiteering during the pandemic which, in the end, hurts consumers, farmers, and ranchers all over the country.
Whether the efforts of the Biden administration will work in taking control of the inflation is still unknown. Meanwhile, consumers are looking for ways to save at the grocery store, as most people opt to go for private label brands.
According to the CEO of Kroger, when you look back on times when there is inflation, customers, in most cases, opt to chose their brand over other brands as they restructure their budget. He added that at this point, they are not seeing any changes in their brand consumerism at this point. However, one thing is for sure: inflation will continue.