Since the pandemic, inflation in grocery stores has skyrocketed, leaving customers with giant bills for their shopping…
And these consumers are not happy.
While many attribute the price increases to corporate greed, the reality is now as simple as executives lining their pockets.
So the question remains…
What exactly boosted grocery inflation so much?
What’s Behind Astronomical Grocery Inflation?
If you think that your grocery bill just keeps getting higher, you’re not just imagining it. In the past few years…
GROCERY PRICES HAVE OUTPACED THE RATE OF STANDARD INFLATION.
Starting in February 2020 to July 2024, grocery inflation grew 25.6%. Standard inflation rates from the period remain at 21.6%.
Shoppers are eager to blame giant companies for increasing prices, especially while these corporations report record profits. Not to mention, shoppers have become increasingly aware of rampant shrinkflation and skimpflation in their groceries.
BUT ARE GREEDY EXECUTIVES TO BLAME? IN REALITY, THE ISSUE IS MUCH LARGER AND MORE COMPLICATED.
In 2020, the Coronavirus pandemic caused prices to balloon for a number of reasons. Consumers were buying en masse to prepare for lockdown, supply chain issues caused sprawling shortages…
And businesses were sinking money to protect essential workers from catching the virus.
But beyond the virus, other factors contributed to the rise in grocery inflation. The war between Russia and Ukraine interfered with global food supplies…
Wage increases for employees also contributed to companies increasing their pricing.
But if these factors are all out of the hands of grocery store executives…
THEN WHY ARE GROCERY STORES ALSO REPORTING RECORD PROFITS?
Store-Brand Savings
Unhappy customers have accurately noticed that while they shell out more and more in essential purchases thanks to grocery inflation…
GROCERY STORE PROFITS HAVE BEEN THRIVING.
But its not because they’re cheating shoppers out of a deal, it’s all thanks to cheaper store brand alternatives.
Because of higher prices, more consumers have been opting for cheaper, store-brand products rather than the traditional name-brand versions. Essentially, while this saves customers money, it also is more profitable for grocery stores.
While this issue is incredibly complex, corporate greed can’t be entirely ruled. After all, CEO of Contonelle said this last year when talking about rising prices:
“IF THE PRICE GOES UP ON BATH TISSUE, GENERALLY DOESN’T MEAN YOU’RE GOING TO USE THE BATHROOM LESS.”
Not a great look.
This year however, more and more customers are pushing back against brands for their high prices and are going out of their way to avoid price-gouging.
While grocery store inflation is on the come-down…
It’s important to remember that nothing is as simple as it appears.
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
