Grocery price discrepancies

[4yourinfo]

So they raised .60 and the grocery raised by a dollar. Always.

Are stores making more profit these days? They are definitely pulling in more $..

[aygart]

I'm confused - Why were all the stores charging more for milk for the past few weeks if they just raised it yesterday?

This was the first increase?

[jye]

Are stores making more profit these days? They are definitely pulling in more $..

If they are making 8% more profit in an inflationary environment where everything is up 8% their profit is actually flat.

[AsherO]

If they are making 8% more profit in an inflationary environment where everything is up 8% their profit is actually flat.

No, if your margins are fixed and prices go up, you make more money (revenue in dollars, adjusted for the price inflation it’s flat).

[jye]

No, if your margins are fixed and prices go up, you make more money (revenue in dollars, adjusted for the price inflation it’s flat).

Obviously the nominal dollar amount of revenue will go up. you just aren’t coming out ahead.

[4yourinfo]

This was the first increase?

Seems to indicate so in the letter

[aygart]

Seems to indicate so in the letter

How

[4yourinfo]

If they are making 8% more profit in an inflationary environment where everything is up 8% their profit is actually flat.

If expenses were 100.00 went up 8% that would be 108.00 in expenses. If income was 500.00 went up 8% 540.00 in income - so you are now coming out ahead?

[4yourinfo]

How

Does the letter not seem to indicate this is the first increase since pesach and they held off for the past couple of months while prices were rising?

[avromie7]

If expenses were 100.00 went up 8% that would be 108.00 in expenses. If income was 500.00 went up 8% 540.00 in income - so you are now coming out ahead?

Now adjust for inflation.

[4yourinfo]

Now adjust for inflation.

At this moment is every worker in the US taking home more money for inflation? Or just a portion of the population..

[AsherO]

Obviously the nominal dollar amount of revenue will go up. you just aren’t coming out ahead.

It’s more complicated since the actual inflation rate across the board is lower than the rate for these products. So you’d have to calculate price-increases across all sales and compare to cost-increases (stuff like overhead, labor costs, packaging, etc) to figure out if they’re gaining, losing, or breaking even.

My guess is that many supermarkets are struggling with HR (finding and retaining qualified staff, and doing so at the wages they hope to pay), so even if it’s a break-even in dollars and cents (whether adjusting for inflation or not), the headache is certainly there.

[AsherO]

At this moment is every worker in the US taking home more money for inflation? Or just a portion of the population..

Wage increases are certainly lagging behind inflation/cost-increases.

[aygart]

Does the letter not seem to indicate this is the first increase since pesach and they held off for the past couple of months while prices were rising?

They held off fo some time before pesach, but how long? 2 weeks? 2 months? More?

[Lurker]

Wage increases are certainly lagging behind inflation/cost-increases.

Difficulties finding new employees causes additional overtime expenses as well.

[yos9694]

Inflation pushes everything up, just not all at the same time. Wages of low level workers are linked to wages of their managers, and their managers managers, and so on, up the chain and across industries. Labor is (mostly) a fungible asset and goods/services are highly correlated to labor. Can't increase price of goods/services too much if labor and materials aren't increasing, or new competitors will undercut. Can't have an increase in labor cost without a resulting increase in cost of goods/services because of the manufacture cost and because the added buying power will mess up supply and demand equilibrium. Cause and effect brings everything up, but those who are in the "cause" bucket will experience a temporary benefit of being increased ahead of the rest of the pack.

White collar workers are probably the last ones to catch up because they have very little (or no) control over the price of their labor. Some professions may not catch up completely for years. At the end of the day inflation is good for no one except the US government (and maybe some individuals/companies who are drowning in debt).

[jye]

Inflation pushes everything up, just not all at the same time. Wages of low level workers are linked to wages of their managers, and their managers managers, and so on, up the chain and across industries. Labor is (mostly) a fungible asset and goods/services are highly correlated to labor. Can't increase price of goods/services too much if labor and materials aren't increasing, or new competitors will undercut. Can't have an increase in labor cost without a resulting increase in cost of goods/services because of the manufacture cost and because the added buying power will mess up supply and demand equilibrium. Cause and effect brings everything up, but those who are in the "cause" bucket will experience a temporary benefit of being increased ahead of the rest of the pack.

White collar workers are probably the last ones to catch up because they have very little (or no) control over the price of their labor. Some professions may not catch up completely for years. At the end of the day inflation is good for no one except the US government (and maybe some individuals/companies who are drowning in debt).

My sense is that frum shoppers are less sensitive to price and won’t switch as readily to an off/ non heimish brand even if the quality is comparable. That allows higher prices to be passed on or even amplified with less pushback from the consumer.

[AsherO]

Difficulties finding new employees causes additional overtime expenses as well.

Assuming the employer pays for/allows overtime

[Lurker]

Assuming the employer pays for/allows overtime

In the food business, it's not like things can just be done tomorrow. If things need to be done, someone's doing it, and they're getting paid. The job market isn't pretty and every employee knows it.

[Lurker]

My sense is that frum shoppers are less sensitive to price and won’t switch as readily to an off/ non heimish brand even if the quality is comparable. That allows higher prices to be passed on or even amplified with less pushback from the consumer.

From what I've seen, unless there's a personal kashrus/hashgacha requirement, frum customers will absolutely switch to a cheaper brand as prices rise.