If you feel like every time you visit the grocery store you lose a little more of your emotional well-being each time, you’re probably not alone.
Many goods and basic necessities – including food – are more expensive than they were a year or even a month ago.
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The consumer price index shows that in April prices increased by 0.3% compared to March. The CPI rose 3.4% year-over-year, which is roughly in line with expectations but certainly shows no signs of inflation falling any time soon.
Here is an overview of price developments from March to April:
- Food: increase of 0.3%
- Energy: increase of 1.1%
- Gasoline: increase of 2.8%
- Electricity: decrease 0.1%
- New vehicles: decrease of 0.4%
- Used vehicles: decrease of 1.4%
- Clothes: increase of 1.2%
- Medical care products: increase of 0.4%
- Shelter: increase of 0.4%
- Transportation: increase of 0.9%
- Medical care: increase of 0.4%
Food is expensive, but it’s complicated
Interestingly, however, food at home remained largely unchanged on a monthly basis. That means the cost of buying, preparing, and preparing meals at home is baseline, and people are paying more or less what they were paying in March.
Good news, since certain foods have experienced large price fluctuations over the past year. Here are some of the foods that increased the most between January 2023 and January 2024:
- Fresh fruit: up 1.4%
- Cereals and bakery products: up 1.5%
- Poultry: up 1.7%
- Fats and oils: up 1.9%
- Processed fruits and vegetables: up 2.5%
- Soft drink : up 3.4%
- Sugar and treats: up 4.4%
- Beef and veal: up 7.7%
So it’s no surprise that many people are choosing to eat at home and avoid potentially expensive restaurant meals.
“The index of meals consumed away from home increased by 0.3 percent in April, as in March,” reports the CPI. “The limited-service meal index increased 0.4 percent and the full-service meal index increased 0.3 percent during the month.”
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So even if people choose to keep their money closer to home, that money still has to go somewhere. Food is considered a basic consumption item, which means we cannot easily give it up. It’s a pretty essential part of our budget.
Walmart executive shares bad news for fast food
As a result, fast food establishments have felt this pinch.
“Consumers continue to be even more discriminating with every dollar they spend as they face high prices in their everyday spending, putting pressure on the QSR industry,” McDonald’s said. (MCD) said CEO Chris Kempczinski during the April 30 earnings call.
Kempczinski added that “in almost all major markets, industrial traffic is slowing.”
McDonald’s menu prices have increased 100% since 2014, more than three times the national rate of inflation.
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Starbucks (SBUX) published equally disappointing results in terms of price inflation, showing a shortfall of 6.49% for an amount of $8.56 billion. Same-store sales fell 4%.
But people still have to eat. And Walmart says that works in its favor.
“As we continue to work closely with our suppliers to reduce costs, we are managing our Walmart U.S. prices, aligning them with competitive price differentials, and customers are responding favorably, resulting in a sustained sales growth and higher gross margins,” said John Rainey, Walmart’s chief financial officer. said during the first quarter earnings call.
“As a result, we continued to see strong momentum in private label sales, with grocery penetration up 30 basis points in the first quarter,” he added.
John Furner, CEO of Walmart US, added that the constant discounts used by Walmart to stay price competitive have outpaced other potential meal providers; Furner said more people are opting for Walmart groceries over more expensive fast food options.
“We’re seeing an even bigger gap between eating at home, preparing meals at home and eating out, which we think can help Walmart for the rest of the year,” he said.
So while a Big Mac combo meal can cost more than $18 at some McDonald’s and a large cup of plain black coffee will cost you almost $5 at Starbucks, McDonald’s is keenly aware that less is more when it It’s about prices right now. .
“It’s about 4.3 times more expensive to eat out than to eat at home,” John Rainey added in a call with CNBC. “And it benefits our business.”
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