Grocery Prices May Soon Reflect Lower Inflation

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WSJ Your Money Briefing 7 min 3 speakers 8 chapters transcribed 2 months ago
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What is the main topic discussed in this episode?

ReliaQuest Advertiser 0:00
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J.R. Whelan 0:30
Here's your money briefing for Thursday, February 2nd. I'm J.R.

What is Whole Foods asking suppliers to do about falling inflation?

J.R. Whelan 0:39
Whelan for The Wall Street Journal. We keep hearing that inflation is steadily declining, but that hasn't significantly eased the strain on your wallet every time you go to the grocery store. That may be about to change. Whole Foods says it's asking its suppliers to reflect easing inflation.
Jaewon Kang 0:54
So as people sort of change their shopping habits, companies are facing a little bit more pressure to offer value so they can hold on to their customers.
J.R. Whelan 1:05
Jaywon Kong covers the food retail industry for the WSJ. Coming up, we'll talk to her about how Whole Foods and other grocery chains are adjusting to respond to consumers changing shopping habits. That's after the break.
ReliaQuest Advertiser 1:18
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Why can’t grocery stores just cut shelf prices without supplier cooperation?

ReliaQuest Advertiser 1:21
Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.
J.R. Whelan 1:55
Whole Foods says it wants the prices consumers pay to better reflect declining inflation, and it's asking its suppliers for help. So what does that mean for price tags on the shelf? And what else are companies doing to try to ease your grocery bill? WSJ food retail reporter Jaewon Kong joins us with more.

How have shoppers changed their grocery habits in response to high prices?

J.R. Whelan 2:12
Hey, Jaewon, thanks so much for being with us. Thank you. So Jaewon, why can't Whole Foods or any store for that matter just lower their prices? Why do they have to go through their suppliers? And what's the relationship there?
Jaewon Kang 2:23
Yeah, so there's a lot to consider for retailers when it comes to pricing. They look at prices given to them by suppliers. They also look at how much competitors are selling products for, you know, how much funding they have to put items on sale. And of course, if it's a type of food that people are really price sensitive to. So depending on what suppliers offer as list prices for their products, retailers will then decide what price tags will be and sell products after that. They're asking them to help the company lower prices because they are starting to hear that costs are starting to come down and they want the retail prices, which are the prices that consumers see, to reflect that.
J.R. Whelan 3:18
You know, Jay, consumer finances have been stretched, and then some, by rising grocery prices, and that's on top of rising prices elsewhere, too. How have the grocery stores seen consumers respond to these rising prices over the past year?
Jaewon Kang 3:31
You know, grocery prices have been high.

What specific tactics is Whole Foods using to bring down consumer prices?

Jaewon Kang 3:35
The Labor Department said grocery prices went up by almost 12% in December compared to a year ago. There is still inflation. It's just prices are still rising. It's just that the pace has slightly slowed. And, you know, various staples like eggs remain pretty expensive. So... What you're seeing from consumers who have been experiencing price increases for well over a year now is that they are responding. So they've been looking for sales, buying cheaper items. Sometimes they're purchasing fewer items. So as people sort of change their shopping habits, companies are facing a little bit more pressure to offer value so they can hold on to their customers.
J.R. Whelan 4:24
So in addition to working with their suppliers, what else does Whole Foods have planned to try to bring down prices and ultimately relieve the strain on consumers?

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