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Feb 21 - It’s Been 30 Years Since Food Ate Up This Much of Your Income


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 2 months ago '23        #1
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ThesOne  topics gone triple plat - Number 1 spot x7
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Feb 21 - It’s Been 30 Years Since Food Ate Up This Much of Your Income
 

 
The last time Americans spent this much of their money on food, George H.W. Bush was in office, “Terminator 2: Judgment Day” was in theaters and C+C Music Factory was rocking the Billboard charts.

Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show.

Relief isn’t likely to arrive soon. Restaurant and food company executives said they are still grappling with rising labor costs and some ingredients, such as cocoa, that are only getting more expensive. Consumers, they said, will find ways to cope.

“If you look historically after periods of inflation, there’s really no period you could point to where [food] prices go back down,” said Steve Cahillane, chief executive of snack giant Kellanova, in an interview. “They tend to be sticky.”

In 1991, U.S. consumers spent 11.4% of their disposable personal income on food, according to data from the U.S. Agriculture Department. At the time, households were still dealing with steep food-price increases following an inflationary period during the 1970s.

More than three decades later, food spending has reattained that level, USDA data shows. In 2022, consumers spent 11.3% of their disposable income on food, according to the most recent USDA data available.

Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps. That is starting to chip away at some sales for food makers and restaurant operators.

Food companies said they are feeling pinched themselves. While commodities such as corn, wheat, coffee beans and chicken have gotten cheaper, prices for sugar, beef and french fries are still high or rising. Companies across the U.S. economy have also raised prices beyond covering their own higher expenses, lifting profits for industries including retail, biotech and manufacturing.

Food inflation has raised the ire of President Biden, who took to Instagram during the Super Bowl to blast food makers that he said were providing less bang for consumers’ buck—putting fewer chips in each bag or shrinking the size of ice-cream containers.

“The American public is tired of being played for suckers,” Biden said. “I’ve had enough of what they call shrinkflation. It’s a rip-off.”

David Chavern, CEO of the Consumer Brands Association, which represents major food manufacturers, said the industry offers many choices at different price points. “We hope to work with the president on real solutions that benefit consumers,” he said.

In suburban Chicago, Lisa Wister said her food bills are rising faster than her family’s income, leading them to make their own granola from scratch and pack their own snacks for the movies. “Everything is a negotiation, an analysis about our budget,” said Wister, an occupational therapist. “It’s exhausting.”

image


Denny’s, Wendy’s and other restaurant chains told investors this month that their guest counts fell last year compared with 2022 levels as consumers, in particular those with lower incomes, feel the financial pinch. Big food makers including Hershey and Kraft Heinz have reported that their sales volumes declined as prices rose for their products, with several reporting a hit to profits in the latest fiscal year—and others an increase.

Oreo maker Mondelez said in January it would continue raising prices on some of its products this year, largely because of cocoa prices, which earlier in February surged past a 46-year record. Hershey said this month it expects more expensive cocoa to cut into the company’s profit this year. Kraft Heinz said inflation is moderating but that its costs are still higher, driven in part by pricier tomatoes and sugar.

Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers. Hiring ski1led workers like mechanics to replace employees who retired during the pandemic is particularly expensive, said Henk Hartong, CEO of Brynwood Partners, which owns 17 food and beverage plants that make Pillsbury cake mixes and other products.

Restaurant chains said they are trying to operate more efficiently to help defray wage increases, but they also expect to raise prices.

“It’s a really fast move and a high percent increase,” Chipotle Mexican Grill CEO Brian Niccol said in an interview, referring to California’s 25% minimum wage increase for fast-food workers employed by large chains, set to take effect in April. “Pricing is going to be part of the puzzle.”

Some restaurant and food companies, including Kraft Heinz, Mondelez International and Olive Garden owner Darden Restaurants, are projecting higher earnings this year. Signs of a consumer-spending slowdown has led others to temper their outlooks, with Starbucks lowering its same-store sales projection for 2024 and frozen-foods maker Conagra reducing its per-share earnings forecast.

Investors have cooled on food stocks. An S&P 500 subindex of restaurant stocks has risen 10% in the past 12 months through Wednesday’s close, while the broader index gained about 25%. An S&P subindex tracking packaged food and meat companies fell roughly 8% over that period.

When Anna Zabinski and her husband eat out these days, she said, they ask themselves whether a side of macaroni and cheese is worth the extra $1.99, and often go for refills instead of ordering more expensive large-size drinks.

Zabinski, a professor from Normal, Ill., said they’ll sometimes split a $20 steak and side dish at Texas Roadhouse or a large sandwich from Jimmy John’s. Nonetheless, she said, “our daily and monthly expenditures still seem higher than even two years ago.”

image


Food manufacturers and restaurants have been offering more deals on some items. J.M. Smucker and Conagra have reduced prices on coffee and margarine, passing through lower costs for coffee beans and edible oils. McDonald’s and Wendy’s said they would offer deals this year aimed at consumers seeking relief from rising prices.

Gary Pilnick, chief executive of WK Kellogg, said the company has been working to market cereals such as Frosted Flakes and Froot Loops to pressured consumers. An ad campaign launched in 2022, for example, encouraged consumers to eat cereal for dinner, pitching it as an easy, inexpensive alternative that, combined with milk and fruit, costs less than $1 per serving. “Give chicken the night off,” the campaign’s tagline says.

Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers.

Kraft Heinz said it is focused on providing affordable options for families, and that while its costs rose 3% in 2023, it raised prices by 1%. WK Kellogg said that before raising prices, the company tries to combat higher costs through greater productivity.

Kellanova said it is working to keep prices as low as possible. Cahillane declined to comment on pricing for his company’s products this year but said that the maker of Pringles and Pop-Tarts hasn’t raised prices to pad its profit.

Cahillane said that as consumers become accustomed to seeing higher prices on supermarket shelves, they will adjust.

“Just like a gallon of gas, it becomes the new price and people get begrudgingly used to it,” he said.

 https://www.wsj.com/econo .. ncome-2e3dd3ed
+6   



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53 comments

 2 months ago '22        #2
HERMES  topics gone triple plat - Number 1 spot x32
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-6   

 2 months ago '17        #3
WHATEVERMAN 
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"Companies across the U.S. economy have also raised prices beyond covering their own higher expenses, lifting profits for industries including retail, biotech and manufacturing."
#thispart

Can we just be real for a sec? We all know this "inflation" is really just a reflection of companies trying to recoup the money they lost in 2020 still. Let's just be honest.
+27   

 2 months ago '09        #4
Flyboy88 
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just for perspective



-8   

 2 months ago '16        #5
00010111  topics gone triple plat - Number 1 spot x24
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 Flyboy88 said 🔗
just for perspective



That graphic is 10 years out of date.
+6   

 2 months ago '09        #6
Flyboy88 
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 00010111 said 🔗
That graphic is 10 years out of date.
nothing changed

-4   

 2 months ago '06        #7
philly337  topics gone triple plat - Number 1 spot x2
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 Flyboy88 said 🔗
nothing changed

This is percent compared to consumer spending

This doesn't mean anything as everything is up about 20-40% from covid still
+8   

 2 months ago '06        #8
philly337  topics gone triple plat - Number 1 spot x2
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And where buddy that told me food prices were back to pre covid levels and still not 20%+ higher
emoji
+13   

 2 months ago '23        #9
20thCentury  topics gone triple plat - Number 1 spot x2
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I been teaching myself how to cook because of prices. Started mastering the simple stuff. Been cooking eggs my whole life, but a couple little youtube tricks been setting em off lately.
+5   

 2 months ago '18        #10
DUCEDUCE  topics gone triple plat - Number 1 spot x3
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 HERMES said 🔗

Nope Trump printing trillions during the pandemic caused this. Cancelled ppp loans caused this. Tax Breaks for the rich caused this.
+7   

 2 months ago '06        #11
imthatinfamous  topics gone triple plat - Number 1 spot x1
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yeah me and the wife have stopped ordering out or going out to eat, costs aren't worth it.
+7   

 2 months ago '06        #12
imthatinfamous  topics gone triple plat - Number 1 spot x1
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 DUCEDUCE said 🔗
Nope Trump printing trillions during the pandemic caused this. Cancelled ppp loans caused this. Tax Breaks for the rich caused this.
Biden didn't do the same with the American Rescue Plan, a 2021 act, with $1.5T? How about the $75B the Biden administration is throwing at Ukraine to lose a war?

This coward "duceduce" is nothing but a homothug that doesn't stand on any factual or solid arguments, bet you he won't even reply to me.
-3   

 2 months ago '04        #13
Chokeabiish 
Props total: 16950 16 K  Slaps total: 1587 1 K
 philly337 said 🔗
And where buddy that told me food prices were back to pre covid levels and still not 20%+ higher
emoji
I came in here just to make the same comment.
+3   

 2 months ago '17        #14
Dante Haversham  topics gone triple plat - Number 1 spot x18
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But @🔗 said the stock market and economy are doing great so I figured everybody could afford to buy groceries.
emoji
+7   

 2 months ago '16        #15
Brucebaner2 
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 ThesOne said 🔗
The last time Americans spent this much of their money on food, George H.W. Bush was in office, “Terminator 2: Judgment Day” was in theaters and C+C Music Factory was rocking the Billboard charts.

Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show.

Relief isn’t likely to arrive soon. Restaurant and food company executives said they are still grappling with rising labor costs and some ingredients, such as cocoa, that are only getting more expensive. Consumers, they said, will find ways to cope.

“If you look historically after periods of inflation, there’s really no period you could point to where [food] prices go back down,” said Steve Cahillane, chief executive of snack giant Kellanova, in an interview. “They tend to be sticky.”

In 1991, U.S. consumers spent 11.4% of their disposable personal income on food, according to data from the U.S. Agriculture Department. At the time, households were still dealing with steep food-price increases following an inflationary period during the 1970s.

More than three decades later, food spending has reattained that level, USDA data shows. In 2022, consumers spent 11.3% of their disposable income on food, according to the most recent USDA data available.

Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps. That is starting to chip away at some sales for food makers and restaurant operators.

Food companies said they are feeling pinched themselves. While commodities such as corn, wheat, coffee beans and chicken have gotten cheaper, prices for sugar, beef and french fries are still high or rising. Companies across the U.S. economy have also raised prices beyond covering their own higher expenses, lifting profits for industries including retail, biotech and manufacturing.

Food inflation has raised the ire of President Biden, who took to Instagram during the Super Bowl to blast food makers that he said were providing less bang for consumers’ buck—putting fewer chips in each bag or shrinking the size of ice-cream containers.

“The American public is tired of being played for suckers,” Biden said. “I’ve had enough of what they call shrinkflation. It’s a rip-off.”

David Chavern, CEO of the Consumer Brands Association, which represents major food manufacturers, said the industry offers many choices at different price points. “We hope to work with the president on real solutions that benefit consumers,” he said.

In suburban Chicago, Lisa Wister said her food bills are rising faster than her family’s income, leading them to make their own granola from scratch and pack their own snacks for the movies. “Everything is a negotiation, an analysis about our budget,” said Wister, an occupational therapist. “It’s exhausting.”




Denny’s, Wendy’s and other restaurant chains told investors this month that their guest counts fell last year compared with 2022 levels as consumers, in particular those with lower incomes, feel the financial pinch. Big food makers including Hershey and Kraft Heinz have reported that their sales volumes declined as prices rose for their products, with several reporting a hit to profits in the latest fiscal year—and others an increase.

Oreo maker Mondelez said in January it would continue raising prices on some of its products this year, largely because of cocoa prices, which earlier in February surged past a 46-year record. Hershey said this month it expects more expensive cocoa to cut into the company’s profit this year. Kraft Heinz said inflation is moderating but that its costs are still higher, driven in part by pricier tomatoes and sugar.

Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers. Hiring ski1led workers like mechanics to replace employees who retired during the pandemic is particularly expensive, said Henk Hartong, CEO of Brynwood Partners, which owns 17 food and beverage plants that make Pillsbury cake mixes and other products.

Restaurant chains said they are trying to operate more efficiently to help defray wage increases, but they also expect to raise prices.

“It’s a really fast move and a high percent increase,” Chipotle Mexican Grill CEO Brian Niccol said in an interview, referring to California’s 25% minimum wage increase for fast-food workers employed by large chains, set to take effect in April. “Pricing is going to be part of the puzzle.”

Some restaurant and food companies, including Kraft Heinz, Mondelez International and Olive Garden owner Darden Restaurants, are projecting higher earnings this year. Signs of a consumer-spending slowdown has led others to temper their outlooks, with Starbucks lowering its same-store sales projection for 2024 and frozen-foods maker Conagra reducing its per-share earnings forecast.

Investors have cooled on food stocks. An S&P 500 subindex of restaurant stocks has risen 10% in the past 12 months through Wednesday’s close, while the broader index gained about 25%. An S&P subindex tracking packaged food and meat companies fell roughly 8% over that period.

When Anna Zabinski and her husband eat out these days, she said, they ask themselves whether a side of macaroni and cheese is worth the extra $1.99, and often go for refills instead of ordering more expensive large-size drinks.

Zabinski, a professor from Normal, Ill., said they’ll sometimes split a $20 steak and side dish at Texas Roadhouse or a large sandwich from Jimmy John’s. Nonetheless, she said, “our daily and monthly expenditures still seem higher than even two years ago.”




Food manufacturers and restaurants have been offering more deals on some items. J.M. Smucker and Conagra have reduced prices on coffee and margarine, passing through lower costs for coffee beans and edible oils. McDonald’s and Wendy’s said they would offer deals this year aimed at consumers seeking relief from rising prices.

Gary Pilnick, chief executive of WK Kellogg, said the company has been working to market cereals such as Frosted Flakes and Froot Loops to pressured consumers. An ad campaign launched in 2022, for example, encouraged consumers to eat cereal for dinner, pitching it as an easy, inexpensive alternative that, combined with milk and fruit, costs less than $1 per serving. “Give chicken the night off,” the campaign’s tagline says.

Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers.

Kraft Heinz said it is focused on providing affordable options for families, and that while its costs rose 3% in 2023, it raised prices by 1%. WK Kellogg said that before raising prices, the company tries to combat higher costs through greater productivity.

Kellanova said it is working to keep prices as low as possible. Cahillane declined to comment on pricing for his company’s products this year but said that the maker of Pringles and Pop-Tarts hasn’t raised prices to pad its profit.

Cahillane said that as consumers become accustomed to seeing higher prices on supermarket shelves, they will adjust.

“Just like a gallon of gas, it becomes the new price and people get begrudgingly used to it,” he said.

↪🔗
Y'all need to hit up Lydl!

 2 months ago '04        #16
shadychef04  topics gone triple plat - Number 1 spot x2
Props total: 19694 19 K  Slaps total: 1606 1 K
Here's a tip thats been saving me and the wifey a lot of money at the food store

If your grocery offers pick up - do it.

Figure out what you NEED for the week or days ahead (not sure if everyone shops for the week) and then place your order.

Picking up your order will save at the very least $30-50 a week. This stops you from going down every aisle and putting sh1t in your cart that you don't need.

You will most likely forget something - but you can always grab it and pay for it at the counter when you pick up your order.
+7   

 2 months ago '23        #17
Typewriter 
Props total: 8771 8 K  Slaps total: 5945 5 K
 WHATEVERMAN said 🔗
"Companies across the U.S. economy have also raised prices beyond covering their own higher expenses, lifting profits for industries including retail, biotech and manufacturing."
#thispart

Can we just be real for a sec? We all know this "inflation" is really just a reflection of companies trying to recoup the money they lost in 2020 still. Let's just be honest.
Yeah, it's been reported for at least a few months now that inflation is coming down, but Groccery prices are not.

Grocery price inflation is not due strictly to current economic policies anymore. There's a bunch of bs reasons that are being given, but at the heart of it, it's that major food producers are refusing to take a pay cut as overhead costs for things like labor, shipping, and processing increase.

Basically, workers are demanding more money, and the companies are making you pay for it.

Gee, if only there was a way the government could like...send these companies a bill or some sort of collections notice requiring them to pay money into a shared fund that is then used to provide things like food, shelter, and medical care to those who really need it....
+3   

 2 months ago '21        #18
Crow42 
Props total: 6827 6 K  Slaps total: 2413 2 K
 DUCEDUCE said 🔗
Nope Trump printing trillions during the pandemic caused this. Cancelled ppp loans caused this. Tax Breaks for the rich caused this.
True

But Spending millions on migrants NOW
anit helping either

Just saying
-1   

 2 months ago '21        #19
Crow42 
Props total: 6827 6 K  Slaps total: 2413 2 K
This will somehow be blamed on Trump

Welp
Good thing groceries are expensive

We can help migrants
Check


The average American
Nahh
-4   

 2 months ago '23        #20
Typewriter 
Props total: 8771 8 K  Slaps total: 5945 5 K
 Crow42 said 🔗
True

But Spending millions on migrants NOW
anit helping either

Just saying
none of that sh1t is what's actually keeping these prices inflated at this point.

It's purely a choice by the food oligopoly to keep prices high. Occam's Razor.
+1   

 2 months ago '10        #21
Shhon  topics gone triple plat - Number 1 spot x3
Props total: 56078 56 K  Slaps total: 4960 4 K
the corner store I go to two times a day most days and buy drinks. the AZ teas that were $0.99 before are now $1.69!
emoji
+4   

 2 months ago '20        #22
Bighempin  topics gone triple plat - Number 1 spot x8
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Reads like corporations are on they fuxk chit.
+1   

 2 months ago '20        #23
Bighempin  topics gone triple plat - Number 1 spot x8
Props total: 23976 23 K  Slaps total: 3324 3 K
 Crow42 said 🔗
True

But Spending millions on migrants NOW
anit helping either

Just saying
Plz explain these racist theory. How does helping migrants/poor people causes corporations to increase prices?
-1   

 2 months ago '23        #24
Typewriter 
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 Bighempin said 🔗
Reads like corporations are on they fuxk chit.
In the great ol' US of A?

emoji

No way!
+2   

 2 months ago '21        #25
Crow42 
Props total: 6827 6 K  Slaps total: 2413 2 K
 Typewriter said 🔗
none of that sh1t is what's actually keeping these prices inflated at this point.

It's purely a choice by the food oligopoly to keep prices high. Occam's Razor.
Maybe
But average Americans are finding it harder to buy food

I’m putting the blame on the current president
As I did when Trump was in office
Understand??

 Bighempin said 🔗
Plz explain these racist theory. How does helping migrants/poor people causes corporations to increase prices?
What’s so racist about that theory snowflake ?

There’s poor people in the inner cities all over America that need help

Ever been to the hood cup cake ?


As I said earlier
Many average Americans have a problem with food , I’m putting the blame on the current president and the administration as I did when Trump was in office
Crazy how we hold trump accountable for everything that happened during his term

But c0ck suckers always have excuses for the current administration

Weird

say something...

Sign me up
 
 

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