(WXYZ) — If you think you were already spending more at the grocery store since the start of the pandemic, well brace yourself, prices are set to go up even further.
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"It doesn't make me feel good, I hope things will get better. I don't know the reason, but I think the prices everywhere are going up," said a local resident.
Since last year, many conglomerates, including Procter & Gamble and Kimberly Clark, have been announcing prices hikes, the most recent to join the bandwagon is General Mills.
This means over a hundred food products including their cereals like Cheerios and Lucky Charms will cost more in 2022.
In a statement issued to 7 Action News, Kelsey Roemhildt, General Mills spokesperson says that this is a result of inflation and other supply chain costs that they forecast for the fiscal year:
“The current operating environment is as dynamic as we’ve experienced in at least a decade. The inflationary environment has increased, including higher prices for commodities, logistics, and other costs in our supply chain. Our first line of defense is our internal program for productivity, Holistic Margin Management (HMM), to become more efficient at what we do,” said Roemhildt in a statement.
“We expect to drive HMM productivity savings of roughly 4% of our cost of goods sold in Fiscal 22. However, inflation is so high right now that productivity alone won’t solve it. Given the level of inflation and other supply chain costs that we forecast for the fiscal year, we will be using all tools in our pricing toolkit, including taking list price increases where needed across our portfolio. This is consistent with what we’re seeing across the food and beverage industry. While the demand picture is uncertain, we’re focusing on what we can control, namely, continuing to compete effectively, taking actions to address the increased cost environment, leveraging our supply chain to service the business better than our competition, and executing our portfolio reshaping actions.”
Source: U.S. Department of Labor, Consumer Price Index for All Urban Consumers (CPI-U)
"So when there is less supply and there is more demand, prices go up, that’s inflation," said Dewey Steffen, CEO & Chief Investment Officer
at Great Lakes Wealth.
Steffen says Americans have enjoyed 0 inflation for almost a decade, but this one thanks to COVID-19 is here to stay for some time.
"The US government instituted the CARES Act last year to help us survive, it was extremely necessary, but they were passing out money. So, they are going out to spend it, so there is extra demand and there is still less items available, so that is extra inflation," said Steffen.
And then there is of course labor shortage, resulting in adding incentives to retain staff.
"The owner has a double whammy, he has employees that you have to pay more to, pass on that to the consumer and the goods that he or she purchased to resell, that's at a higher price, so here she has to pass that on to the consumer," he said.
Even a bargain hunters’ favorite, Dollar Tree, has started to raise prices from their traditional $1 to $1.25, and rolling it out to all stores nationwide by end of fiscal Q1 2022. In a statement, the chain's President and CEO Michael Witynski blamed it on inflation.
So, the big question: when are we going back to paying less for things we love?
Steffen says he disagrees with the Federal Reserve’s stance of this being transitory. In fact, Steffen and other experts believe inflation will stay for a while.
But in the meantime, regular folks like us can work around the situation by being smart.
"You have to be an informed consumer. You can't just run out and start buying things with the price that’s there on the shelf, you need to shop around, look for coupons," said Steffen.
Now don’t think of inflation as economy’s Thanos. Steffen says there are benefits during this time, people can make money by investing and securing a high-paying job as employers look to attract talent.
Consumer Price Index - October by WXYZ-TV Channel 7 Detroit on Scribd