Kraft Heinz puts the brakes on price hikes as grocers battle for inflation-weary shoppers
Done playing ketchup… Last week Kraft Heinz said it would pause its price hikes, noting that 90% of its planned increases were already in effect. The biz behind kitchen staples like Oscar Mayer wieners and Kraft Mac & Cheese grew its sales10% last quarter as it jacked prices by 15% last year. Price hikes have also helped big foodies like Pepsi, McDonald's, and Coke rake in higher profits. But as inflation starts to cool, some grocery giants are pushing back for fear of losing customers:
- Smallstart: Walmart, America’s largest grocer, is reportedly telling some suppliers price hikes are a nonstarter (and is promoting its cheaper private labels). Its earnings today could shed more light on its pricing plans.
- Bowl foods: Amazon-owned Whole Foods said it lowered prices on cereal and bread, and that it'll focus on discounts this year. It also reportedly asked big suppliers to lower their prices.
Two price roads diverged… in a Jell-O wood. While Kraft, Pepsi, and Slim Jim maker Conagra said they’d ease off on price increases, others are taking the hike road. Nestlé, the world’s largest food company, said last week that it's still on the hiking path. It raised prices 8% last year, but said that wasn't enough to offset surging costs. Meanwhile, Unilever (picture: Hellman's mayo, Ben & Jerry's), said earlier this month that it'd keep upping prices this year.
The little guy can win when giants fight… While inflation's slowing in the goods and services sector, food has been sticky. Last week's consumer-price report showed that food inflation actually accelerated from December to January. It’s early innings, but if grocers and food giants start battling for customers by lowering prices (or at least\ not hiking them) that could cool food inflation. Consumers want to see food prices fall, but they’re expected to jump another 7% this year.