Inflation Is Showing Up At The Worst Place Possible For Consumers: Walmart

Monday, August 12, 2019
By Paul Martin

by Tyler Durden
ZeroHedge.com
Mon, 08/12/2019

When it comes to aimlessly bemoaning about how inflation is a giant mystery that nobody will ever figure out, the Federal Reserve are experts. When it comes to actually assessing real world inflation that is rearing its head in places that have a direct impact on consumers, the Fed is conspicuously absent from the conversation.

And of all places inflation can rear its head, showing up at Walmart might be the worst possible outcome for consumers that can least afford it. According to Bloomberg, product manufacturers are boosting prices across the board, which means that “something has to give”, both for Walmart and for the consumer.

Meanwhile, average prices for consumer goods were up 2.3% in the first six months of 2019, rising at the fastest pace in several years. Walmart says it saw “modest inflation” in the first quarter, but a shopping trip cost an astounding 5.2% more in June than it did a year prior. That’s a profound difference, especially for many lower income consumers that are forced to be thrifty.

Companies like Coca-Cola, Pepsi and Procter & Gamble are all raising prices, putting Walmart to the decision of whether or not they can absorb the price hike at the expense of their profit margins, or if they should pass them along to shoppers, risking losing sales. Walmart also has the option to try to work with suppliers to delay or mitigate the impact, and it’s estimated that the retailer will use a combination of all three things.

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