Drink Shortages and Price Hikes Are Coming, Costco Rival CEO Says
For many shoppers, it doesn't seem like grocery sales receipts can get any higher at the checkout counter than they already have. According to sources in the wholesale industry, however, inflation prices may get worse before they get better, specifically in beverage aisles ahead of a busy season.
Boxed CEO Chieh Huang recently revealed on Fox Business News that the outlook this summer looks bleak for continued food-at-home inflation and drink product shortages. Huang's company Boxed is a wholesale retailer that offers direct delivery of grocery items to consumers' doorstep.
"This summer, I think beverages, you're going to start to see kind of increased prices or shortages just because… already these factories are pumping it out at full capacity, you add in the increased demand of the summer, we don't know where that's going to go," he said.
Recently there has been a predicted increase in the cost of wine, which is also anticipated to hit consumers over the summer It's not the wine itself that is seeing costs rise but the bottles it comes in, which have gone up 20% in price. Unfortunately, this is expected to be passed down to shoppers. But it's not the only drink making the total cost at grocery stores higher.
According to Consumer Price Index (CPI) data released by the U.S. Department of Labor, as of April 2022, nonalcoholic beverages and beverage materials have seen a 9.8% increase compared to Spring 2021. Beverages like milk (15%) and other dairy products have also seen inflation pressures, both Coca-Cola and PepsiCo have raised prices this year, citing supply-chain and labor problems, and coffee has hit its highest prices in a decade.
Huang also noted that while many in the industry thought inflation for all items would start to ebb months ago, it "hasn't abated," and retailers are wondering "where does it end?"
Currently, shoppers are paying 8.6% more for food at the supermarket over last year, according to the CPI. Many customers are opting to store-hop for better deals, cut back on expensive items, and hunt for coupons to offset costs.
Issues affecting grocery prices have largely been a combination of global crisis and environmental factors. Severe weather, gas prices affecting supply chains, Russia's invasion of Ukraine, and an avian flu outbreak affecting 38 million chickens across the U.S. have all factored into rising food costs.
Currently, bacon (19%), beef roast (18.6%), cereal and bakery products (7.8%), eggs (11.2%), and seafood (11.2%) have seen the biggest increases in cost over the last year due to inflation.
If you're shopping around for the best deal, you might want to be sure and snag these products at Trader Joe's before they get discontinued.