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ECON Inflation Is Showing Up At The Worst Place Possible For Consumers: Walmart
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  1. #1
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    Inflation Is Showing Up At The Worst Place Possible For Consumers: Walmart

    Now THAT'S a problem.

    Fair use cited so on and so forth.

    https://www.zerohedge.com/news/2019-...mers-walmart-0

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

    by Tyler Durden
    Mon, 08/12/2019 - 10:18

    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.

    Brian Yarbrough, an analyst at Edward Jones, said:

    “Walmart will do everything they can to not pass this on to consumers, but at some point they will have to because there is not enough cost savings to offset the inflation we’re starting to see. Still, they have a lot of leverage over suppliers so I’m sure they’re pushing back.”
    And while most retail chains can sometimes embrace inflation, especially with the macroeconomic picture "steady" and unemployment supposedly in good shape, Walmart's dominance has come specifically from having the lowest prices, which are generally about 10% lower than traditional supermarket chains. If prices start to creep up even the slightest, consumers may defect to places like Aldi, Dollar General or Amazon.

    Jim Hertel, a senior vice president at retail consulting firm Inmar Analytics, said:

    “Walmart is convinced that the more they widen their price advantage, the better off they will be.”
    On the other hand, if Walmart's competition raises their prices, the company is leaving money on the table by not following in kind. Higher wages, transportation costs and e-commerce investments have all pressured Walmart of late, and the retailer has already bumped some prices higher as a result.

    Even smaller specialty retailers like O’Reilly Automotive and Tractor Supply Company have both hiked prices in the second quarter. Most of these hikes have been a result of, or at least have been blamed on, tariffs.

    O’Reilly Chief Operating Officer and Co-President Jeff Shaw said in July:

    “Everybody is under the same pressure from the price increases. And what we’re seeing in the field is everybody adjusting the prices accordingly.”
    And with another round of 10% tariffs on $300 billion worth of Chinese exports starting next month, more prices and hikes are almost a foregone conclusion. Meanwhile, the Fed will likely do what they are experts in: stand idly by and look the other direction as these hikes continue to break the backs of the consumer.

    "How much of those increases will be borne by consumers? None of us know, except Walmart's CEO” Yarbrough concluded.

  2. #2
    It's ZeroHedge and that's more of a problem. Down in LA the is a port where containers are building. People who sell to places like Wal-Mart have bought ahead for the first round of tariffs and then the second round, then China signals devaluation. What is the value of the widgets sitting in the containers with no real demand(pricing pressure). What can they do?

    http://www.portoflosangeles.org/busi...ner-statistics

  3. #3
    Another trick you will see manufacturers do is downsize packages. For example, bags of chips that use to be 12 oz, will now be 9 oz. Same price, just less quantity. Locally we have been seeing that for awhile. Expect to see that with other products, such as beverages, cans of corn, etc, etc.

    "No one ever rescues an old dog. They lay in a cage until they die. PLEASE save one. None of us wants to die cold and alone... --Dennis Olson "

    Si vis pacem, para bellum

  4. #4
    Quote Originally Posted by NoDandy View Post
    Another trick you will see manufacturers do is downsize packages. For example, bags of chips that use to be 12 oz, will now be 9 oz. Same price, just less quantity. Locally we have been seeing that for awhile. Expect to see that with other products, such as beverages, cans of corn, etc, etc.

    Another trick is to sell you a manufactured piece of meat which isn't as healthy as meat at a higher price than meat.

  5. #5
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    Heck the Chinese are selling plastic rice based upon some threads we have seen in the past.

  6. #6
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    Quote Originally Posted by 20Gauge View Post
    Heck the Chinese are selling plastic rice based upon some threads we have seen in the past.
    Wait! What? At Walmart?
    Sherree

  7. #7
    Quote Originally Posted by SouthernBreeze View Post
    Wait! What? At Walmart?
    No, in China...

    Summerthyme

  8. #8
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    Sorry about that! Yes in China.

    The problem is the Chinese morality is far different from that of the Western World. They believe in "buyer beware" to the point that if you purchase and eat plastic, then it is your fault. No matter what they do. This is why they have no issue with antifreeze in our food products. It extends to everything they produce.

  9. #9
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    WOW! Thanks, you two! I was almost panicked. I've bought the biggest portion of my storage rice at WalMart!
    Sherree

  10. #10
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    Quote Originally Posted by SouthernBreeze View Post
    WOW! Thanks, you two! I was almost panicked. I've bought the biggest portion of my storage rice at WalMart!
    We have found that Sams works well for bulk buying. We buy US rice and get it for less than $20, (these days), for 50 lbs. They also have a variety of the rice. Much better than Walmart. Then again it could be just our location that is better.

  11. #11
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    Quote Originally Posted by 20Gauge View Post
    We have found that Sams works well for bulk buying. We buy US rice and get it for less than $20, (these days), for 50 lbs. They also have a variety of the rice. Much better than Walmart. Then again it could be just our location that is better.
    No, you're right. We have bought rice at Sam's, too. Different varieties that Walmart doesn't carry. I love Sam's Yellow Rice in bulk.
    Sherree

  12. #12
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    Quote Originally Posted by SouthernBreeze View Post
    No, you're right. We have bought rice at Sam's, too. Different varieties that Walmart doesn't carry. I love Sam's Yellow Rice in bulk.
    I haven't tried the yellow as of yet.

    We have been storing lots of white and just began to store the brown, (in the freezer), so the wife will eat some of it. It is primarily for our preps.

  13. #13
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    Quote Originally Posted by 20Gauge View Post
    I haven't tried the yellow as of yet.

    We have been storing lots of white and just began to store the brown, (in the freezer), so the wife will eat some of it. It is primarily for our preps.
    We don't store Yellow Rice long term. Just for a year or two. It has spice mix in it that could go bad if stored for much longer than that, unless you store it in the freezer. I use this rice to make Cajun dishes out of. It really tasty. Don't look for Yellow rice in large bulk bags. It comes in boxes, each with individual packs of 8.
    Sherree

  14. #14
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    The plastic rice has a long storage life.

  15. #15
    Quote Originally Posted by hiwall View Post
    The plastic rice has a long storage life.
    "No one ever rescues an old dog. They lay in a cage until they die. PLEASE save one. None of us wants to die cold and alone... --Dennis Olson "

    Si vis pacem, para bellum

  16. #16
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    Check out Miracle Rice on Amazon..

    Zero net carbs!!!

    https://www.amazon.com/gp/slredirect...getName=sp_atf
    WARNING!!!

    My use of pronouns will offend faggots, the mentally ill, and the gender confused.

  17. #17
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    Quote Originally Posted by NoDandy View Post
    Another trick you will see manufacturers do is downsize packages. For example, bags of chips that use to be 12 oz, will now be 9 oz. Same price, just less quantity. Locally we have been seeing that for awhile. Expect to see that with other products, such as beverages, cans of corn, etc, etc.

    This was done thru obbie's years in office and will be the same now....

    Texican....

  18. #18
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    Quote Originally Posted by GammaRat View Post
    Check out Miracle Rice on Amazon..

    Zero net carbs!!!

    https://www.amazon.com/gp/slredirect...getName=sp_atf
    Riced cauliflower is low on carbs also. I use it a lot in stir fry and when I make indian butter chicken. Its somewhat bland tasting so it absorbs spices well.

    tbd

  19. #19
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    Admin Note.

    Love prep threads about Rice but this is not about Rice but nflation, please bring it back on Subject. Thanx.
    "It ain't no secret I didn't get these scars falling over in church."


    "My Shoes are too Tight. But it is ok as I have forgotten how to Dance."

  20. #20
    Quote Originally Posted by 20Gauge View Post
    Sorry about that! Yes in China.

    The problem is the Chinese morality is far different from that of the Western World. They believe in "buyer beware" to the point that if you purchase and eat plastic, then it is your fault. No matter what they do. This is why they have no issue with antifreeze in our food products. It extends to everything they produce.
    Yep!! This is it in a nutshell

  21. #21
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    I don't really know about the prices in WalMart but I have noticed prices going up a bit in Publix. I only buy what is on sale there now.
    Sherry in GA

  22. #22
    They need to pay for the lack of security somehow!
    Confederate American

  23. #23
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    I'm surprised with the trade tensions with china over the tariffs that we have not seen a drop in the price of chicken and pork in the grocery stores. With china not buying our food stuff there should be an excess on the market driving down prices here. I have not really seen that yet. In the grocery stores in my AO boneless chicken and boneless pork loin are running about $1.50lb when on sale and leg quarters about 60cents.

    When we had a spat with russia back when obama was in office they stopped buying our chicken and leg quarters got down to 9cents a pound here and boneless chicken got down to a buck as the excess supply was moved through the supply chain. So this time either they are better managing the supply or selling the excess somewhere else. I was hoping to get at least a drop in price by another third and refill the freezers.

    tbd

  24. #24
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    If price hikes are tariff-related, then that's not inflation but taxes. Remember that Big Nanny loves you, so it's being done only with your own best interests in mind!

    In any case, inflation calculations now are being done using hedonics (as I recall brought to you starting during the reign of Ronald Reagan). When steak is too expensive you'll switch to hamburger, then when hamburger gets expensive you'll switch to grass clippings from your lawn, but as far as I can tell at no point is that officially inflation because you're just substituting one product for another instead of going without.

  25. #25
    Quote Originally Posted by tanstaafl View Post
    If price hikes are tariff-related, then that's not inflation but taxes. Remember that Big Nanny loves you, so it's being done only with your own best interests in mind!

    In any case, inflation calculations now are being done using hedonics (as I recall brought to you starting during the reign of Ronald Reagan). When steak is too expensive you'll switch to hamburger, then when hamburger gets expensive you'll switch to grass clippings from your lawn, but as far as I can tell at no point is that officially inflation because you're just substituting one product for another instead of going without.
    The basket of goods.

    http://www.bls.gov/cpi/

  26. #26
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    Quote Originally Posted by Satanta View Post
    Admin Note.

    Love prep threads about Rice but this is not about Rice but nflation, please bring it back on Subject. Thanx.
    sorry....

  27. #27
    I'm sorry to I can't get the thought of reUSeable rice out of my head.

  28. #28
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    Quote Originally Posted by twobarkingdogs View Post
    I'm surprised with the trade tensions with china over the tariffs that we have not seen a drop in the price of chicken and pork in the grocery stores. With china not buying our food stuff there should be an excess on the market driving down prices here. I have not really seen that yet. In the grocery stores in my AO boneless chicken and boneless pork loin are running about $1.50lb when on sale and leg quarters about 60cents.

    When we had a spat with russia back when obama was in office they stopped buying our chicken and leg quarters got down to 9cents a pound here and boneless chicken got down to a buck as the excess supply was moved through the supply chain. So this time either they are better managing the supply or selling the excess somewhere else. I was hoping to get at least a drop in price by another third and refill the freezers.

    tbd
    Actually this would be a sign of inflation if you added rice to the mix......lol..... bad joke......

    Truthfully, the inability of prices to lower despite the pressure to do so as you have described, if a classic sign of inflation taking hold in a BAD way. Not really big on the doom, but this is a real warning sign!

  29. #29
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    Quote Originally Posted by tanstaafl View Post
    If price hikes are tariff-related, then that's not inflation but taxes. Remember that Big Nanny loves you, so it's being done only with your own best interests in mind!

    In any case, inflation calculations now are being done using hedonics (as I recall brought to you starting during the reign of Ronald Reagan). When steak is too expensive you'll switch to hamburger, then when hamburger gets expensive you'll switch to grass clippings from your lawn, but as far as I can tell at no point is that officially inflation because you're just substituting one product for another instead of going without.
    They did that with a lot of things.

  30. #30
    Quote Originally Posted by 20Gauge View Post
    Actually this would be a sign of inflation if you added rice to the mix......lol..... bad joke......

    Truthfully, the inability of prices to lower despite the pressure to do so as you have described, if a classic sign of inflation taking hold in a BAD way. Not really big on the doom, but this is a real warning sign!
    You do know what lag time is.

    http://www.sapling.com/8087404/time-...-fiscal-policy

    Americans are a little to impatient the Chinese are the other way.

  31. #31
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    Quote Originally Posted by Hi-D View Post
    The basket of goods.

    http://www.bls.gov/cpi/
    While the CPI is a measure of inflation, as far as I know it's not the same as the official inflation number. The official inflation number today is not calculated the same as it was in the 1970s and earlier (John Williams at shadowstats is supposedly doing calculations for today using the same calculations they did back then), so anyone using inflation numbers from both eras to compare inflation now with then doesn't truly understand what's going on. You can try to research the term "hedonics" but mostly what you'll get is a whole lot of rhetorical smoke and confusion, and in the end it comes down to "trust us, we know what we're doing." The problem is I think they don't know what they're doing.

  32. #32
    Like I said I traded pms when the Hunts did. palladium was under 35.00 when I was first involved with inflation numbers. Ever lose 30000.00 basically because the fed raised rates a 1/4 and locked the market down for a week. I have.

    Like which hand Greenspahn USed to carry his briefcase with, we all hung on the money supply m1,m2,m3. and how inflation was measured. This is not my first rodeo.

  33. #33
    The Walton family are globalists, and they are set $$$-wise for life.
    https://safeg.net/home A Safe Alternative to Harmful 5G Wireless

    Psalm 94:1 O Lord, the God of vengeance, O God of vengeance, let your glorious justice shine forth! 2 Arise, O Judge of the earth. Give the proud what they deserve. 3 How long, O Lord? How long will the wicked be allowed to gloat?

  34. #34
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    Quote Originally Posted by TammyinWI View Post
    The Walton family are globalists, and they are set $$$-wise for life.
    So what is your point

    tbd

  35. #35
    Quote Originally Posted by GammaRat View Post
    Check out Miracle Rice on Amazon..

    Zero net carbs!!!

    https://www.amazon.com/gp/slredirect...getName=sp_atf
    Thank you for that link!
    I once was blind but now I see!...
    Acts 9:11 The Lord told him, “Go to the house of Judas on Straight Street and ask for a man from Tarsus named Saul, for he is praying. 12 In a vision he has seen a man named Ananias come and place his hands on him to restore his sight.”

  36. #36
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    Quote Originally Posted by NoDandy View Post
    Another trick you will see manufacturers do is downsize packages. For example, bags of chips that use to be 12 oz, will now be 9 oz. Same price, just less quantity. Locally we have been seeing that for awhile. Expect to see that with other products, such as beverages, cans of corn, etc, etc.

    I don't eat name brand foods, processed/package foods and haven't for some 30 years but did so way back when.............so lately I've had to get some items for people like candy and ice cream and was in shock to see what they've done to packaging of them................one example Klondik ice cream...............I remember them and the size they were.........and just picked up a package of them and when I saw them opened up the size of the bar it looks like they cut their thickness in half from back when I ate them 30 years ago...............It shocked me how small they were...........

  37. #37
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    Quote Originally Posted by TammyinWI View Post
    The Walton family are globalists, and they are set $$$-wise for life.
    I think the minute someone becomes a billionaire they have no choice but to become a globalist............at that point their money controls how they see humanity, politics and the future rather than the other way around.

  38. #38
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    Quote Originally Posted by twobarkingdogs View Post
    So what is your point

    tbd
    More specifically, what is their inflation point?

    Who believes that the current annual rate of inflation is only 1.81%? (according to https://inflationdata.com/Inflation/...?reloaded=true)

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