Grocers, Suppliers Face 'Unprecedented Inflation'
Grocers and suppliers are facing an accelerating round of surging prices.
The federal government reported this week that the Consumer Price Index increased 0.5% in July on a seasonally adjusted basis after rising 0.9% in June. Over the last 12 months, the index increased 5.4% before seasonal adjustment.
The food index increased 0.7% in July as five of the major grocery store food group
indexes rose, and the food away from home index increased 0.8%. The energy
index rose 1.6% in July, as the gasoline index increased 2.4% and other energy component indexes also rose. The food at home index increased 2.6% over the past 12 months.
All six major grocery store food group indexes rose over the span, with increases ranging from 1.1% (nonalcoholic beverages) to 5.99% (meats, poultry, fish and eggs). The index for food away from home rose 4.6% over the last year. The index for limited service meals rose 6.6% over the last 12 months, and the index for full service meals rose 4.3%. Both 12-month increases were the largest in the history of the respective series, which were first published in 1998.
This week Tyson Foods Inc. CEO Donnie King said the company is struggling to raise prices fast enough to keep up with rising costs.
"We have seen accelerating and unprecedented inflation," King said during the company’s third-quarter earnings call. "Inflation is up about 14% during our 3Q [third quarter] and 9% year-to-date."
Tyson is planning to raise retail prices on Sept. 5 after already having increased prices for restaurant customers.
The Springdale, Ark.-based food products company last quarter hiked its average price for pork by 39%. Beef and chicken prices jumped by 12% and 16%, respectively.
According to the Bureau of Labor Statistics, the index for meats, poultry, fish and eggs continued to increase in July. This index rose 1.5% in July; this was its seventh monthly increase in a row and followed a 2.5% increase in June. The index for cereals and bakery products, which declined in June, rose 1.2% in July, its largest one-month increase since April 2020. The index for other food at home rose 0.8% in July, also the largest monthly increase since April 2020. The index for nonalcoholic beverages rose 0.7% in July, and the index for dairy and related products advanced 0.6%.
The index for fruits and vegetables was the only major grocery store food group index to fall in July, declining 0.9% after rising 0.7% in June. The index for fresh fruits fell 1.8% over the month.
The energy index increased 1.6% in July after rising 1.5% in June. All the major energy component indexes increased over the month. The gasoline index rose 2.4% in July following a 2.5% increase in June. (Before seasonal adjustment, gasoline prices rose 2.5% in July.) The index for natural gas rose 2.2% in July after increasing 1.7% in both May and June. The electricity index increased 0.4% in July after falling 0.3% the prior month.
The energy index rose 23.8% over the past 12 months. The gasoline index rose 41.8% since July 2020. The index for natural gas rose 19% over the last 12 months, while the index for electricity increased 4%.
The rest of the Bureau of Labor Statistics indices can be found here.
