by Jim Dudlicek / NGA Director, Communications and External Affairs
First, the bad news: Inflation continues to, well … inflate.
Overall inflation rose another percent from May to June, hitting 9.1 percent, according to the Bureau of Labor Statistics, marking a new 40-year high. Worse, inflation for food eaten at home – grocery – climbed to 12.2 percent year over year, compared to inflation for restaurants, which rose another 0.9 percent or 7.7 percent for the year.
So, what’s the good news?
Well, same-store sales for independent grocers were up every week in June compared to a year ago, according to data from FMS Solutions.
And there are a few glimmers of hope among individual product categories.
For example: Meat, which has been a volatile category since the start of the pandemic, stayed flat from May to June, though up just over 8 percent since this same time last year. Beef (whole muscle and grinds), bacon and pork chops dropped modestly (between 0.1 percent and 1.2 percent), as did fresh fish and seafood. However, poultry was up – 1.5 percent for the month and 17.3 year over year.
Among other categories, inflation for fruits and vegetables dropped 0.3 percent since May (with citrus down 3 percent), peanut butter was down 2 percent and eggs saw an uptick of just 0.3 percent for the month, though up just over 33 percent for the year – still the highest year-over-year gain.
What does this all mean?
Here’s what the team at FMS advises: “In order to take advantage of the great opportunities that this inflation presents for the grocery industry, stores must stay on top of their pricing more regularly than was required in the past. As the buying power of customers continues to shrink, they will become more and more price sensitive. This means while it is imperative that stores keep prices in line with the market averages, being more expensive than your competitors is going to sharply effect your customer counts negatively.”
From the standpoint of your relationship with consumers – be transparent. Be helpful. Advise them on how to maximize value as you move heaven and earth while working with your suppliers to secure favorable deals.
Proving to customers that you’re in their corner is the best way to ensure loyalty over the long haul, no matter how dim that glimmer of hope might be.