US grocery prices poised to climb as soaring fuel costs drive inflation

{"text":[[{"start":0,"text":"US consumers face a fresh period of grocery price rises as surging diesel and freight costs threaten to unleash another bout of food inflation on the nation’s supermarket shelves."}],[{"start":19.6,"text":"Higher food costs could revive a politically sensitive issue on the heels of double-digit food inflation early in the decade that has strained US consumers. Candidates in the upcoming midterm elections have seized on grocery affordability as an issue in response to voter concerns."}],[{"start":36.68,"text":"PepsiCo, the maker of Doritos tortilla chips and Lay’s crisps, suggested prices would rise as it confronts “this new wave of inflation that is coming to every country, not only the US, given energy prices and given agricultural prices”, chief executive Ramon Laguarta told analysts last week. The company earlier this year reduced prices up to 15 per cent for certain foods."}],[{"start":59.68,"text":"His comments echo disclosures about prices made in recent weeks by US packaged foods companies including Campbell’s and Conagra, supermarket mainstays."}],[{"start":69.4,"text":"Food companies are exposed to the record price of diesel fuel. Spot rates for long-haul truck trailers have increased about 50 per cent year on year, according to DAT, a freight marketplace. Inputs and packaging materials including aluminium, corn, soyabean oil and urea fertiliser are all up by double digits from a year ago, according to Piper Sandler."}],[{"start":90.6,"text":"“Food price inflation is going to accelerate,” said Ricky Volpe, a food economist at California Polytechnic State University. “When you do the margin math for manufacturers, wholesalers and retailers, it’s really hard to see how food prices aren’t going to bump up in the next two, three months.”"}],[{"start":107.84,"text":"Volpe did not expect food inflation to accelerate anywhere close to the pace of 2022, when disruptions tied to the Covid-19 pandemic and Russia’s war with Ukraine caused it to soar more than 10 per cent."}],[{"start":120.32,"text":"Instead, he said it could gather speed from an annualised rate of 2.2 per cent in August. The latest outlook from the US agriculture department foresees grocery prices rising 2.4 per cent this year."}],[{"start":132.32,"text":"Higher grocery prices would challenge food companies’ efforts to revive flagging sales volumes. Frugal consumers have trimmed purchases to budget for more expensive petrol. The loss of food subsidies has pressed certain poor households. And more Americans are taking appetite-diminishing weight-loss drugs."}],[{"start":null,"text":"

"}],[{"start":150.48,"text":"Retailers claim to be working to hold down food inflation, with Walmart and Costco funnelling billions of dollars of US tariff refunds into lowering prices for some items. The food-at-home portion of the consumer price index decerlated during the summer, bringing a measure of relief to consumers."}],[{"start":167.4,"text":"Kroger, the largest traditional supermarket chain, has pledged to bring prices closer in line with discounters and recently banished Red Bull energy drinks from its shelves over a price disagreement."}],[{"start":179.3,"text":"The German discount grocer Aldi, which mainly sells own-brand goods, is running an autumn deal in which nearly a third of its everyday inventory costs less than last year, including $1.99 packs of chicken breast that are the lowest since 2022. Avocado prices are down nearly a fifth year-on-year, according to Circana."}],[{"start":198.64,"text":"“When you see that prices are higher, that’s not true across the board,” said Jonathan Feeney of Optimal Advisory, a consultancy. “There’s areas where prices are meaningfully lower.”"}],[{"start":209.9,"text":"But other signs show price acceleration. A food price index compiled by Consumer Edge was running about 4 per cent above a year ago in the past four weeks, said Michael Gunther, the group’s senior vice-president of research and market intelligence. It had bottomed out at 3.3 per cent in August. The data is based on sales receipts at Walmart, Target and Meijer, retailers which together sell about a quarter of US groceries."}],[{"start":235.42,"text":"“Pricing pressure remains fairly widespread and has begun to firm again,” Gunther said."}],[{"start":241.36,"text":"Everyday household purchases tracked by Numerator, a market research firm, found prices increased 0.7 per cent month-on-month in September after decreasing in the previous two months. The US Bureau of Labor Statistics is due to present its September consumer price reading on Wednesday."}],[{"start":257.76,"text":"Campbell’s, which sells Goldfish crackers and its namesake soups, recently informed retailers of 4 per cent to 5 per cent price increases on 60 per cent of its portfolio."}],[{"start":267.82,"text":"The company has pursued ways to reduce operating costs, but “unfortunately, that was not enough given the extreme amount of inflation that we are seeing right now”, Todd Cunfer, chief financial officer, told a Barclays conference in September. “So we had to take some pricing actions.”"}],[{"start":284.36,"text":"Conagra is implementing “strategic inflation-justified pricing actions”, particularly in frozen foods such as Birds Eye vegetables and Marie Callender’s dinners. Lamb Weston, which supplies McDonald’s french fries and frozen potatoes for retailers, noted that as “inflation has continued to drive input costs higher”, it will “make appropriate pricing actions as warranted”."}],[{"start":306.2,"text":"Companies that have not warned of new consumer price rises are absorbing higher costs. Spicer and sauce manufacturer McCormick said it expected 6 per cent to 7 per cent cost inflation this year, raising its earlier forecast."}],[{"start":319.68,"text":"The supermarket group Albertsons on Tuesday outlined a pressing need to become more competitive by lowering prices, but chief executive Susan Morris said the cuts would be “surgical” and not broad based."}],[{"start":331.12,"text":"“The reality right now is that the economy is tough for many of our customers,” Morris told analysts. “Fuel prices are elevated and inflation remains stubbornly high for our customers and in our [profit and loss].”"}],[{"start":348.88,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1791961725_7393.mp3"}