Consumers have been bludgeoned for years by higher prices. In this era of inflation, discounts disappeared as prices of everyday items climbed higher and higher each year. It has been a long time, but value is finally returning in various consumer areas.
This summer could be called the season of markdowns as corporations across America have become concerned that price-sensitive consumers have been trading down to cheaper goods and services. Many companies have seen sales decline as discount stores and labels have taken market share.
While the Federal Reserve Bank and the Biden administration applaud the progress made on inflation, the truth for the consumer on Main Street is that inflation is still rising. Sure, the headline inflation rate has been falling, but inflation itself is rising — just at a slower rate.
After several years of benefiting what airlines called “revenge travel,” consumers are balking at astronomic ticket prices for domestic travel. Airlines have reversed course dramatically, which has triggered a race to the bottom on domestic ticket prices.
After several years of benefiting what airlines called “revenge travel,” consumers are balking at astronomic ticket prices for domestic travel. Airlines have reversed course dramatically, which has triggered a race to the bottom on domestic ticket prices. Some readers may already know that some big retail chains have been hawking lower prices for several weeks.
Even the discounters are discounting prices. Walmart has cut prices on 7,200 products to compete with rivals. Big Lots, after a hit to sales in June, intends to “significantly grow” its close-out bargain business. Retailers like Ikea, Aldi, Walgreens, and Target also have announced price cuts.
Auto dealers, after years of jacking up prices for new vehicles, are suddenly seeing empty showrooms and stagnant sales. In July, discounts started popping up around the country and according to Kelley Blue Book, an average of $3,383 per vehicle was lobbed off prices. That was the highest level of discounts in three years.
Fast-food restaurants, long the haven of low-priced fare, have had some of the sharpest price hikes since the pandemic. They had risen so much that even die-hard fans of places like McDonald’s abandoned their burger for food at home. McDonald’s, Burger King, Taco Bell and Starbucks, to name a few, have since rolled out what they call “value meals” with great fanfare.
Prices at fast-food restaurants, long the haven of low-priced fare, had risen so much since the pandemic that even die-hard fans of places like McDonald’s abandoned their burger for food at home. Now, those same fast-food companies are rolling out what they call “value meals” with great fanfare.
Eating at home, however, has not escaped the price crunch. Food prepared at home still saves you money with prices growing at 1.1 percent per year versus dining out at 4.1 percent annually. Yearly food inflation overall has fallen somewhat from a recent high in August 2022 to 2.2 percent in July 2024.
The most recent Consumer Price Index showed that the cost of food at home is up 26.9 percent over the last five years and almost 30 percent over the most recent four-year basis. The bottom line: the price level of groceries in aggregate is the highest on record. Sure, some prices are coming down, while others are still climbing.
In a sense, it pays to eat healthier today. Items such as apples, frozen fruits and vegetables, potatoes, rice, and pasta have seen price declines while prices for bacon, pork chops, hot dogs, juices and drinks, eggs, and butter are still rising.
I can tell you that after years of price increases in my local supermarkets, I automatically select store brands over name brands in most items because they are cheaper. I also have changed my habit of just shopping at one market. Instead, I frequent whatever grocery store offers the best weekly prices for protein, produce, etc.
Do I think price controls on food prices would work as some have suggested? Not really. Few realize that most states already have laws to restrict price gouging. They have been instituted for short times with success in times of emergencies such as floods, and other climate-related events, and even in the pandemic in some cases.
If inflation continues to fall as economists predict, even the most price-gouging of companies will have to relent and drop prices or lose market share to others. In the end, it is the customer and not the government who will dictate prices, and most consumers are fed up with paying for everything.
