Food prices will continue to climb – with no end in sight – as inflation continues to grip the US economy, some of the nation’s major food suppliers and restaurant chains have said.
Kraft Heinz, Tyson and Campbell Soup have all warned they will raise prices on some products due to soaring labor, packaging, ingredient and transportation costs, according to a report from the Wall Street Journal.
Fast-food outlets like McDonald’s, Shake Shack and Cracker Barrel have also reported feeling the pinch which has been partly passed on to consumers.
“Inflation is real, and it’s not going to get better in the restaurant business anytime soon,” Shake Shack CEO Randy Garutti said at an investor conference Tuesday, according to the report.
The Labor Department said Friday that grocery store prices rose 11.9% in May over the past few years, while those at restaurants and other eating places jumped 7.4%, marking the biggest increase. in over four decades for both.
Kraft said it would raise prices in August for several items, including Miracle Whip, Classico pasta sauce, Maxwell coffee and select deli meats, the Journal reported.
Campbell Soup announced plans in April to raise prices for the third time in the past year as the rising cost of some condensed soups hurt sales to baby boomers, CEO Mark Clouse said, according to The report.
“We know the pressure consumers are feeling,” Clouse said on a conference call Wednesday.
Tyson Foods said it raised beef prices by an average of 24% in the three months ending April 2, and Sanderson Farms, the third-largest chicken producer, said last month that the cost of its products had jumped by 34% for the quarter ending April 30. , reports the Journal.
Hormel Foods, the maker of Spam, said prices of corn and soybean meal for livestock feed rose more than 125% and 40%, respectively, in early May. These exorbitant prices are expected to continue, in part due to cold, wet weather in the Midwest this spring.
Industry executives told the Journal that more and more people are opting for cheaper brands due to sticker shock at the cash register or choosing to eat out less often.
According to analysis by Moody’s Analytics Senior Economist Ryan Sweet, the average American household has been forced to shell out an extra $460 a month as soaring food and fuel prices have strained family budgets at across the country.
Talks between grocery stores and sellers have become tense more often as retailers fear losing shoppers to higher prices, industry executives told the Journal.
McDonald’s, meanwhile, is examining whether customers can afford the price increases, Ian Borden, the company’s head of international business, said on an investor call.
“We have the approach that we want to do more frequent increases but at smaller levels,” Borden said, according to the report.
To offset white-hot inflation, some companies are selling smaller packages at higher prices per ounce, the newspaper said.
The steady price spikes can be attributed to several factors, including increasingly expensive fuel prices, Russia’s invasion of Ukraine, bad weather in major crop-growing regions, meat factories in short of staff and the endemic avian influenza which has led to the death of 40 million birds. , reports the Journal.