Consumers Don't Know Why Prices Are Rising
Consumers reading newspapers or listening to radio and television broadcasts are probably aware that much of the world has experienced unusual weather conditions this year. They may or may not have drawn the conclusion that crops in their own, and other countries, have been affected. Or that this, in turn, is the reason why food prices are rising so drastically.
Supermarkets have been trying hard to absorb many of the increases and cushion their customers. In Britain, Mark Price, managing director of Waitrose, optimistically told BBC Radio 4's Today program that "a combination of a good summer vegetable harvest and a good global wheat harvest would see price reductions on some products and a leveling-off on others."
The Independent newspaper, however, claimed that this message conflicted with the concerns of farmers unable to harvest cereal crops because the ground was too wet for the heavy equipment necessary for the job. A government ban preventing the use of tractors and other heavy equipment on waterlogged fields was temporarily lifted after the National Farmers' Union pressured the Department for the Environment, Food & Rural Affairs.
A shortage of honey this year is also anticipated. As discussed on RetailWire a few months back, consumers may not realize that "the poor harvest is symptomatic of a wider malaise," the Independent reports. This threatens not only the bee colonies but a significant part of food production dependent on crops pollinated by bees.
One fairly typical British beekeeper quoted expects barely a third of his usual production. An overall drop of more than 50 percent across the country has been predicted with one of the UK's biggest suppliers warning that supermarkets may run out of stock before Christmas. Shortages in other countries have pushed prices up by 60 percent in the last 12 months.
Retailers may be trying to protect themselves, their suppliers and their customers but not being open about what is really going on may, in the long term, cause more dismay and confusion when price rises and shortages continue.
Asda on Tuesday proclaimed that food inflation had peaked, even as official data showed it rising at record levels, while also announcing plans to cut prices on more than 5,000 items this fall.
"Despite today's record inflation figures I'm confident that food price inflation has peaked and that we are beginning to see the cost of goods stabilize," Asda's chief executive Andy Bond said in a statement.
Discussion Questions: Are retailers doing enough to explain shortages and price rises to consumers? Or are they safe to assume that most people have picked up enough from news reports to "get it"? What more can they do to show that they have shoppers' best interests at heart in challenging times?
[Author's commentary] In the U.S., like the U.K, there don't seem to be any in-store communications from supermarkets when prices go up. It's just kind of a shocker and perhaps more communication about the realities of supply would soften the blow. The link between supermarkets doing what they can to protect shoppers and farmers doing what they can to make a living and produce enough food, may need to be more explicit.