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Kil
Evil Skeptic
USA
13477 Posts |
 Posted - 11/18/2008 : 10:25:30
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Grocery Price Increases May Be Here to Stay, Analysts Assert. Despite Lower Oil Costs, Companies Unwilling to Drop Rates
As I wandered the grocery isles at Vons last night, I wondered why there was little or no reduction of prices given that the price of oil has dropped significantly in the last month or so. That was, after all, the rational we were given for the higher prices for groceries. The cost of shipping had skyrocketed and it seemed reasonable that the suppliers had to make adjustments in order to get their product to market.
From article:
For prices to drop, consumers have to hope that companies' competitive juices start flowing again. The drop in oil and ingredient prices is creating a high-stakes game of chicken in the shopping aisle, Perner said.
If companies keep their prices at current levels, they can reap higher profit margins. But if one company starts cutting prices to lure customers away from competitors, it could start a price war.
"As soon as the first [company] in a category reduces prices, the others will follow suit. But they're all hoping the other one doesn't" cut prices, Perner said. |
We may be paying less at the pump, but don't expect food prices to come down anytime soon.
I honestly think there should be a national boycott of the traditional Thanksgiving meal. People should forgo that big (expensive) meal in favor of hotdogs, chips with a generic brand soda and wine.
But that's not going to happen, so get used to bending over and taking one for “higher profit margins” and happy suppliers.
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Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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H. Humbert
SFN Die Hard
USA
4574 Posts |
Posted - 11/18/2008 : 10:49:01 [Permalink]
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Bah. Free market in action.
I remember this shit with OPEC. When oil production was down, gas prices were high. OPEC would shrug and say "we can't do anything, the market sets the price." Then later oil production would go up. But instead of letting the prices fall, OPEC would shut off the pipes and create "artificial scarcity" to keep the price of oil and gas high. So what happened to letting the market set the price? Oh, right, that's just an illusion.
Markets are just too easily manipulated. Big business has the average consumer by the throat. They like to pretend they don't have the power to set their own prices, but they do.
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"A man is his own easiest dupe, for what he wishes to be true he generally believes to be true." --Demosthenes
"The first principle is that you must not fool yourself - and you are the easiest person to fool." --Richard P. Feynman
"Face facts with dignity." --found inside a fortune cookie |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 11/18/2008 : 11:32:18 [Permalink]
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At least, gas prices are going down rather than oil companies doing the same (keeping the same prices and just pocketing the difference) as they generally do back home.
Adam Smith theory being Free Market asks, among other things, for an infinity of buyers and an infinity of suppliers to chose from. Obviously it is all theoretical but most markets are reasonably close from having a large number of suppliers. It is, however, far from being true from other markets, oil being a prime example but even other more mundane markets such as the car industry are also failing on this respect. |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 11/18/2008 : 12:23:25 [Permalink]
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Humbert:
Markets are just too easily manipulated. Big business has the average consumer by the throat. They like to pretend they don't have the power to set their own prices, but they do. |
Well, we do have some power, but in order to be effective, we need lots of people to cooperate and look for less expensive alternatives for a while. (Store brands or generic brands are often as good as brand named foods so that's a good place to start.)
Last night, I looked for a whole chicken for roasting to make chicken salad with. The chicken in the meat section was very expensive. I saw one brand of fryer, a whole chicken for 16 dollars. What? Others were priced at more like 9 dollars which is still very expensive for a whole fryer. Oddly, they had hot already roasted rotisserie chicken for around 7 dollars. Since I was making salad with it, I bought one of those. Now, I just have a hard time believing that a profit wasn't being made by all. Even with going to the extra trouble of roasting the bird and packaging it in a fancy box, what used to cost more than a whole raw chicken now costs less.
Go figure...
Is the supplier selling those birds to them for less, or is the market taking a beating on them?
Edited out extremely redundant sentence. |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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chaloobi
SFN Regular
1620 Posts |
Posted - 11/18/2008 : 12:32:13 [Permalink]
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| I read somewhere there's a lag time between the move in oil prices and the move down stream move in price of everything that depends on oil. I think it was NPR or something. Can't remember exactly. My expectations are thus already right sized. Don't expect anything good and you won't be disappointed. In fact, you're likely to be delighted on occasion. |
-Chaloobi
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astropin
SFN Regular
USA
970 Posts |
 Posted - 11/18/2008 : 13:53:32 [Permalink]
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Originally posted by Kil
I honestly think there should be a national boycott of the traditional Thanksgiving meal. People should forgo that big (expensive) meal in favor of hotdogs, chips with a generic brand soda and wine.
But that's not going to happen, so get used to bending over and taking one for “higher profit margins” and happy suppliers.
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We are doing Chinese takeout and playing poker for Thanksgiving.
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I would rather face a cold reality than delude myself with comforting fantasies.
You are free to believe what you want to believe and I am free to ridicule you for it.
Atheism:
The result of an unbiased and rational search for the truth.
Infinitus est numerus stultorum |
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 11/18/2008 : 15:51:28 [Permalink]
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Originally posted by Kil
I honestly think there should be a national boycott of the traditional Thanksgiving meal. People should forgo that big (expensive) meal in favor of hotdogs, chips with a generic brand soda and wine. |
The problem is that people generally aren't willing to do what needs to be done for a boycott to be successful.
Look at the gasoline "boycott" emails that float around the Internet every spring. One day without filling up? Big whoop-te-do. Even if everyone actually did get on board with those things (I've seen no indication that many have), it'd hurt the big oil companies not at all, because the next day there would be a lot more people buying gas. The only way a gas boycott would work is if a huge percentage of the population boycotted for something like three months, and then stood together and with one voice said, "we've gone this long without gasoline, we can go longer, what are you going to do about it?"
A Thanksgiving meal boycott? It might hurt turkey processors and cranberry-sauce canners, but most of the other items in such meals are run-of-the-mill products that get eaten every other day, too. It'd be interesting to know if the total amount of food eaten on Thanksgiving actually surpasses the total amount of food eaten on any other day (in which case a boycott might impose a fractional penalty on all food sellers), but I'm not sure it does. Getting a big batch of family together means more food cooked in one spot, but those people that travel to eat are eating zero food at their own homes that day, so I think it balances out. Plus, the leftovers become Friday's pre-shopping meals, so there's probably a lot less food purchased the next day.
And you'd have a hard time getting health-conscious folks or vegetarians to give up their salads in favor of franks and chips.
Like with gasoline, for people to send a message to the food producers about prices, people would actually have to eat a lot less than they do now, for a long enough period of time that it significantly and negatively affects the quarterly reports of the companies involved. All of them. It's not enough to say, "don't eat turkey," because people will switch to chicken or ham, benefitting those producers at the expense not of the turkey processors (who probably also process chickens) or of the turkey sellers (who also sell chicken), but of the turkey farmers (lots of them here in Virginia), most of whom would simply switch to producing a different product.
No, the boycott would have to be "don't eat for three months." A tough line to sell. The food industry pretty much has everyone who doesn't garden or farm over a barrel. |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 11/18/2008 : 16:11:45 [Permalink]
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Well, yes but...
If people actually did choose generic or store brands over name brands, you would see something happen. And that is doable. Not that I expect it to happen, but it's doable.
If people visited their farmers market, (we have several on different days, but then, we are a farming state) that would bring down the cost of produce in the market.
If many more people visited their 99 cent or dollar stores, (ours carries some produce and lots of canned and frozen foods) you would see a drop in prices at the supermarkets. Again, doable.
Smarter shopping is doable. It just takes a bit more work is all.
I already do what I am suggesting. If everyone did it, and said why, you would see price drops more in line with the lower cost of shipping.
But I'm not holding my breath for that to happen... |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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Dr. Mabuse
Septic Fiend
Sweden
9688 Posts |
Posted - 11/18/2008 : 16:42:18 [Permalink]
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Originally posted by Kil
Even with going to the extra trouble of roasting the bird and packaging it in a fancy box, what used to cost more than a whole raw chicken now costs less.
Go figure...
Is the supplier selling those birds to them for less, or is the market taking a beating on them?
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I'd place my bet on a chicken that used to be raw, but closing on exire-date. Cooking it will extend its shelf-life if only for a short while longer, and sold as at a discount. |
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Lower oil cost, but food will stay expensive
