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UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

grocerygazette.co.uk

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Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#171

Post by magicalist »

Tyrek wrote: post #138
titzer wrote: post #116

Earlier quoted context omitted.

It's both increased wholesale food costs and price gouging. Profits have never been higher all along the board. Everyone in the chain is "passing the cost on" and also taking a little extra cut.

gouging is an incredibly unhelpful context in a macroeconomic sense. In cases of shorter term scarcity (e.g. toilet paper during early covid), you can have instances of gouging. But over a longer-term period where prices are calibrating to demand/supply dynamics, price increases simply reflect the shifting balance between supply and demand. Should we be concerned about why there are shifts in demand/supply? Sure.(In…

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Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#172

Post by UncleOxidant »

andy_ppp wrote: post #137

I cannot believe supermarkets these days, it is insane the increases in prices, I’ve seen £5 for a tube of normal toothpaste and £6 for a tiny Pizza that is sometimes available for £3. How people on modest salaries survive I don’t know. Quite often I’m starting to notice dark patterns in pricing where things you normally didn’t worry about will have randomly increased by £2-3 and you get the checkout and you’ve spent…

I saw $6.99 for a pack of 12 flour tortillas yesterday. Could not believe it. At that price I'll try making my own.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#173

Post by legitster »

engineeringwoke wrote: post #98
legitster wrote: post #68

Earlier quoted context omitted.

I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg? > They didn't have the pricing power/their customers didn't have the tolerance for rising prices/ Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addres…

> Or a magic 'greed' button that they refused to hit before now. There's some empirical evidence from Australia that this is exactly what they did. Also an island nation that heavily imports food https://www.theguardian.com/business/2023/feb/24/an-economic...

The linked study didn't really make that claim. All it really showed was that only a small portion of inflation was returned in the form of wages. It didn't really attempt to figure out the reasons for the profits.

I don't know why people get so hung up on this though: If you have less stuff to sell, and fewer employees to sell it, your profit margins are going to be higher! That doesn't mean though that you are maximizing your revenue potential. Which is probably why despite all of these reports of "record profits" you are not seeing exploding stock evaluations.

Also, it doesn't hurt that inflation is always going to be favorable to retailers. You buy inventory at the pre-inflation price and sell it at the post-inflation price. Even if you just price to keep up with inflation, you are going to report "record profits" every quarter just by nature of inflation.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#174

Post by felipemnoa »

izzydata wrote: post #122
boc wrote: post #35

Demand for food is inelastic, so it makes sense that companies are raising prices as high as possible since people still have to eat. Generally this leads to price competition from other food brands, but when single companies own dozens/hundreds of food brands it’s easy to act like a cartel and keep prices high.

Jokes on them. I just eat less food now to compensate. That will show them.

And to put cherry on top, you will become leaner and healthier. Now THAT will really make them think twice!

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#175

Post by petesergeant »

crop_rotation wrote: post #31

The UK politics seems like a separate level of dysfunction. It seems like all the worst decisions being made together. For some reason people voted for Brexit. The PM who was the chief Brexit Campaigner (Boris Johnson) had to resign because of entirely avoidable mistakes. The next PM had to resign too soon due to trying to bring policies which were not well thought out. The current PM had to be annointed since it did…

> what does the outlook look like policy wise for the UK

Sunak will gracefully lose the next election, by a lot, but a lot less than Truss or BJ would have lost it by, and having helped to slow the freefall in reputation by the Tories and steadied the economy a bit. Keir Starmer will be a decent and competent but dull leader for two terms, and the who the heck knows. But the next ten years or so should be pretty dull, in a good, centrist sort of way, ideally culminating in rejoining the EU.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#176

Post by aww_dang »

legitster wrote: post #68
Espressosaurus wrote: post #22

Earlier quoted context omitted.

They didn't have the pricing power/their customers didn't have the tolerance for rising prices/coordinated action and corporate consolidation means prices are going up and it doesn't matter what your choices are. Circumstances materially changed over the last few years, and inflation is a great time for profit taking as we're seeing, which reinforces the inflation. In a competitive environment the excess profit-takin…

I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg? > They didn't have the pricing power/their customers didn't have the tolerance for rising prices/ Just for everyone's sanity, it's WAY easier to believe that there are underlying market conditions that should be addres…

>I don't think there was a magical point in consolidation that let them increase the price of eggs ad hoc. Or a magic 'greed' button that they refused to hit before now. Why not just make it $30 an egg?

I'm not sure this can be approached from a rational examination of economic premises alone. You raise good questions. However political economy also should be considered.

Let us imagine for a moment that this narrative is being advanced to deflect from government largess in the economy. Under this scenario court economists have an interest in protecting the regime, while the regime and academic institutions generally have a symbiotic relationship. If these incentives make sense, the narrative can be better understood in this political context.

Unfortunately this hypothesis suggests that there is very little we can say here without this discussion devolving into the regular flames we see on this topic.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#177

Post by mattgreenrocks »

xd wrote: post #4

A lot of the inflation on food is increasingly feeling like businesses cashing in. For instance my old go to brand of breed increased by over 50% months ago.

I'm having trouble understanding how much of food shrinkflation is down to actual costs going up versus exploiting the current market dynamics to squeeze more profit.

I understand it's probably a mix of both, but it's hard to tell the relative proportion as a consumer.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#179

Post by dazc »

crop_rotation wrote: post #31

The UK politics seems like a separate level of dysfunction. It seems like all the worst decisions being made together. For some reason people voted for Brexit. The PM who was the chief Brexit Campaigner (Boris Johnson) had to resign because of entirely avoidable mistakes. The next PM had to resign too soon due to trying to bring policies which were not well thought out. The current PM had to be annointed since it did…

Conservative Govt has proven to be a disaster and people will vote in Labour out of frustration despite knowing they will almost certainly do worse.

Not optimistic for the next ten years or so.

Re: UK: Food inflation rises to 18.2% as it hits highest rate in over 45 years

#180

Post by havefunbesafe »

jaqalopes wrote: post #30
GalenErso wrote: post #10

As someone who doesn't live in the UK, the impression I get from headlines is that the UK is becoming poorer by the day, the NHS has collapsed, crime is exploding, poverty is rising, most people can't afford anything anymore, the Royal Mail is hanging by a thread, and the economy is in free fall. What's the reality? In London and outside?

Anecdotally, my buddy (31M) in London says he's having the time of his life. Making a lot of money at BP, parties every weekend, just moved into a nice flat with a partner. I suspect, just like in America, that if you're inside the "formal economy" (corporate job with real benefits and potential for career growth) your life is pretty great. If you're outside that (service worker, gig economy, small business owner, NE…

Nooooot a great time for innovation (read: productivity)
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