Shop Talk
Retailers, consumers and prices
Check Out Line: Consumers beware! Rising prices even at Wal-Mart
Check out rising prices even at Wal-Mart.
Pressures created by rising costs have caused even the world’s largest retailer, known for its ”rollback” discounts, to boost the prices that consumers pay for groceries. Wal-Mart Stores raised average prices on supermarket items by about 6 percent in a month, according to a recent J.P. Morgan study in Virginia that compared the prices of 31-item goods sold at its supercenters, and at supermarket rivals Kroger, Safeway, Harris Teeter and Whole Foods. Specifically, the study found that prices at a supercenter in Virginia rose 5.8 percent, the most significant sequential increase since JP Morgan started price comparisons in January 2009. While the world’s largest retailer remains the cheapest among supermarkets, rivals such as Kroger and Safeway are gaining ground, according to J.P. Morgan. Rising costs of raw materials and oil are pressuring companies to pass on costs to consumers with higher prices.
Indeed, clothes makers such as Nike, VF Corp and Hanesbrands are facing the same conundrum. And British baker Greggs said soaring wheat prices were set to push up costs, emphasizing a theme that may be repeated for such food makers as General Mills, Kellogg, Kraft and Sara Lee.
However, the timing is not good as the state of the U.S. economy is still uncertain and unemployment remains stubbornly high, leading many consumers to still be wary about spending. U.S. retailers in July posted weaker-than-expected sales despite increased discounting. Also in the basket:
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Arugula no cure for food deserts-expert
Adam Drewnowski, director of the Nutritional Sciences Program at the University of Washington in Seattle, says the United States needs to take home economics into account as it battles childhood obesity and attempts to eradicate “food deserts”.
His comments come as first lady Michelle Obama has made it her mission to reduce childhood obesity within a generation. They also land on the heels of a White House task force report that made several anti-obesity recommendations, including using cash incentives to bring more healthy, affordable food into the nation’s food deserts.
Food deserts, in general, are poor areas that are not served by traditional grocery stores. The U.S. Department of Agriculture estimates that 23.5 million people, including 6.5 million children, live in low-income areas that are more than a mile from a supermarket. Many of the people in that group are poor and about 1 million of them do not have access to a car.
“Ensuring access to healthy, affordable foods is absolutely the way to go, however, access needs to be measured not only in terms of distance. It needs to be measured in terms of economic access,” Drewnowski said. “I think we’re making the assumption that if only a grocery store were closer, everyone would be eating fresh asparagus all day.”
While experts recommend eating the most nutritious foods — and some go further by encouraging more expensive fresh, local or organic items – Drewnowski said that for low-income groups, the focus should be on the most nutritious foods for the money.
He put together an Affordable Nutrition Index to help consumers identify such foods, which include carrots, sweet potatoes, broccoli, oranges and bananas. Also in the ANI are frozen and cooked fruits and vegetables as well as some prepared foods like select Campbell’s soups.
“The problems of obesity and poverty are linked and we cannot have middle-class solutions for the poor … By saying eat fresh this, fresh that, we encourage the poor to behave like the middle class,” Drewnowski said. ”If there is a store going into a lower income neighborhood selling kiwi and arugula despite the best intentions, (improved access) is not going to happen.”
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