Managing Director and Retail Analyst at GlobalData Retail
Food inflation has been horrific. In May, prices for food bought at grocery stores was up by 26.3% over the same period in 2019. The crumb of comfort is that the rate of increase is now leveling off. On a one year basis, food prices in May rose by only 1.0%. That doesn't unwind all of the previous inflation, but it least it means the trend is headed in the right direction. The power to raise prices is slipping away from many of the big CPG companies as consumers reach a tipping point and double down on money-saving behavior. From our own data we know that even as inflation has moderated, the number of people buying on promotion has increased. So too has brand switching. Making consumable products last longer and stretch further is another coping mechanism on that has shot up. As such, it was interesting to read in the Financial Times (link in comments) that CPG firms are now rolling out more discounts in an attempt to take the edge of price increases and bolster their volumes. It isn't complete relief for the consumer, but it's a step in the right direction. #retail #retailnews #CPG #FMCG #pricing #promotions #inflation
