Executive Briefings

Why Cheaper Food in 2016 Was Not Necessarily Good News

For food shoppers, 2016 was a back-to-the-future experience, with retail prices deflating for the first time since Lyndon Johnson was president. The year is expected to end with an annual drop of between 0.5 and 1.5 percent in the retail price of food prepared at home, according to the U.S. Department of Agriculture's Economic Research Service.

In plain English, that's the mostly raw food you put in your grocery cart, as opposed to cooked and prepared food at a restaurant or fast-food counter, the price of which went up 2.4 percent this year.

Unless your shopping basket was heavy with guacamole during the months when labor and weather issues sent the price of Mexican avocados skyrocketing, your grocery bills probably were lower this year.

That might be reason enough for consumers to cheer, but deflation after several years of flat price growth has complicated the ledgers of growers and grocers alike.

Kroger Co., a Cincinnati-based chain that owns Ralph’s supermarkets, cut its sales and profit forecasts and lowered its capital investment plans after two difficult quarters earlier this year. It is offering buyouts to about 2,000 non-store employees, in what some say is a prelude to layoffs at the chain.

Read Full Article

In plain English, that's the mostly raw food you put in your grocery cart, as opposed to cooked and prepared food at a restaurant or fast-food counter, the price of which went up 2.4 percent this year.

Unless your shopping basket was heavy with guacamole during the months when labor and weather issues sent the price of Mexican avocados skyrocketing, your grocery bills probably were lower this year.

That might be reason enough for consumers to cheer, but deflation after several years of flat price growth has complicated the ledgers of growers and grocers alike.

Kroger Co., a Cincinnati-based chain that owns Ralph’s supermarkets, cut its sales and profit forecasts and lowered its capital investment plans after two difficult quarters earlier this year. It is offering buyouts to about 2,000 non-store employees, in what some say is a prelude to layoffs at the chain.

Read Full Article