Nielsen Research just released their Supermarket Pricing Trends and noted the increase of 0.44 percent is much lower than last year at this same time. They look at 45 different items that includes everything from butter to bleach and bacon to hot dog buns. Those same 45 items today will cost you, on average, $143.65.
Contrary to what we've written for our radio show, Insight on Business, the new survey says private label products have actually lost ground in pricing. In fact, private store brands fell by 4.7%. We don't think that is because of panic selling on the part of the labels...we do think it's a correction in the inflated pricing we saw from last year.
The report incorrectly suggests that the price of dairy items have fallen due to the fact they were "over priced" last year. Somebody in New York City must write this stuff. The real reason dairy pricing has dropped is because the dairy farmers are receiving less than half of what they made last year. In fact, times are so bad on many of the nation's dairy farms we're beginning to wonder if the commercial dairy industry might be the next thing to head "South of the Border". Meanwhile, anti-trust issues are popping up against the handful of companies that control the US milk market.
So, what does this mean to you...if you are in the business of selling products or services. We think it suggests you can raise prices...slightly IF you are trying to cover for increases passed on to you. However, be careful...consumers have more information today than just two years ago and it price adjustments are too far out of whack. Expect a backlash.
Michael P. Libbie - Insight Advertising, Marketing & Communications - Learn more about us at www.InsightCubed.comand follow us on Twitter, @MichaelLibbie. And, of course...read us in The Des Moines Register.