The two largest grocery companies in the United States have announced they will be raising prices.
Cincinnati, Ohio-based Kroger, which operates more than 2,800 outlets in the U.S., announced inflation in the U.S. economy has forced it to raise its retail prices 2 to 3 percent in the second half of 2021. Kroger CFO Gary Millerchip told The Daily Mail the grocery conglomerate will be “passing along higher cost to the customer where it makes sense to do so.”
Boise, Idaho-headquartered Albertsons Companies, which has more than 2,200 locations across the U.S., is also raising prices due to inflation, it announced recently.
“[Management has] expressed similar concerns that inflation would run hotter in the second half of this year,” it said.
Consumer demand for groceries soared 50 percent last year, lifting food retailer same-store sales nearly 16 percent industrywide, according to new research in FMI-The Food Industry Association’s “The Food Retailing Industry Speaks 2021” report.
Increased demand is combining with labor shortages to strain the U.S. grocery store chain business model, with 80 percent of retailers surveyed said by FMI saying they were having difficulties attracting and retaining employees. And 42 percent said supply chain disruptions – in part caused by labor shortages national and globally – continue to hurt their businesses.
Meanwhile, sales at food and beverage stores rose 5.7 percent in August compared to August 2020, according to advance data from the U.S. Census Bureau, while sales at food services and drinking places jumped 31.9 percent year-over-year. Overall U.S. retail sales increased 15 percent in August compared to August 2020.
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