Why Consumer Prices Keep Rising
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Here's your Money Briefing for Wednesday, May 12th. I'm J.R. Whalen for The Wall Street Journal. If you've been to the grocery store or restaurant lately, you've felt the pinch. Prices are going up.
The price increases are coming at a tough time for consumers. People who received stimulus checks in the spring have likely spent through most of that money.
So why are prices rising so sharply, and how are consumers dealing with them? We'll ask our food retail reporter, Jaywon Kong, after the break.
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The prices for various consumer goods have risen a lot from a year ago, some by double-digit percentages, and that's leaving many shoppers feeling sticker shock.
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But are these sharp increases expected to continue? Our reporter Jaewon Kong has been tracking prices and talking to manufacturers, and she's here with us to discuss. Jaewon, thanks for being here.
Sure, thanks for having me.
So Jaewon, it's been hard not to notice rising prices, but you've been tracking this closely. Where are we seeing prices coming up the most?
Sure. So we're seeing it in a wide range of consumer products. So on the food side, we're seeing prices go up for produce like apples and berries and some meat. Packaged food makers have said price increases are coming. And restaurant operators, too, are raising prices for delivery and menu items. And Other companies have said they will be raising prices for household products like diapers, foil wrap, home appliances, and also garden and lawn products. And some of the distributors have also said food and consumer product makers are planning to raise prices by up to 10%. So that does not mean consumers are going to experience that exact same percentage, but it puts some pressure on retailers to decide how much of it they want to pass down to consumers and how much they want to absorb.
So I guess one of the big questions is why are prices going up? What's behind this?
Prices are going up for a couple of reasons. One being prices for commodities that get used a lot as base ingredients. So, you know, things like resin. And that's been going up since the winter storm in Texas. And it gets used a lot in things like to-go containers that restaurants use, coolers that a lot of companies use. And... You know, we're seeing those items go up in price and at the same time a number of other ingredients like corn and lumber have all been going up as well. And some of that is also increasing prices for packaging. Then we also have transportation and freight costs which are going up as well, partly because companies are running low on drivers and they're having to pay up for people who are willing to do that work.
And these factors are all trickling down the entire supply chain and are driving up prices for consumers.
And on the receiving end of all of this is the consumer. How are they dealing with this? It's got to be putting a squeeze on people's finances.
So consumers are definitely noticing the increase in prices and they're switching to store brands from name brands on staples like detergent.
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