With demand so elevated during the pandemic, grocers have not had to discount as many items as they normally would have, said the chief executive officer of Albertsons Cos., which operates 2,277 supermarkets including chains like Jewel-Osco, Safeway and Vons.
“When there’s a shortage in supply, it makes no sense to promote aggressively,” Vivek Sankaran said in an April 26 interview. “That’s why you see inflation in some categories. It just makes no sense to play with price at this point.”
These higher food prices come at a time when U.S. gasoline prices are also rising, pinching everyday consumers.
“It has the prospects of being tough and getting tougher as the year progresses. There is some residual stimulus out there, but as that is used up or has been saved, it will increase the pressure on consumers in terms of just their regular budget,” Bartashus said.
Food inflation is also hitting restaurant chains. At Dine Brands Global Inc., parent company of Applebee’s and IHOP, packaging, pork and pancake mix prices are the big areas where prices are rising, CEO John Peyton said in a May 5 interview. Chicken prices are also rising, with companies reporting surging demand and occasional outages as poultry supply runs low.
So far, Dine Brands hasn’t raised national menu prices, but it could happen later this year and franchisees can always elect to raise their own prices. “Commodity and labor costs have got upward pressure on them right now,” Peyton said.
For TGI Friday’s Inc., its pork prices that have been the biggest issue lately.
“Pork has been our biggest priority, primarily getting the rib product and the bacon products that we need. We’ve seen an increase in cost. Fortunately we have the supply that we need, but it is more expensive,” CEO Ray Blanchette said in an interview. “There’s been some supply chain issues that we’re now paying for.
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