Retailers Resist Food Price Increases

May 31, 2022
Food retailers are increasingly pushing back on processors who try to impose price increases as inflation persists at double-digit rates.

Food retailers are increasingly pushing back on processors who try to impose price increases as inflation persists at double-digit rates.

The Wall Street Journal reports that major retailers like Kroger are asking suppliers to justify price increases before accepting them, with Kroger looking at commodity and packaging prices. When suppliers insist on increases, retailers have been using tactics like switching to private label, stockpiling meat and other commodities, or simply refusing to carry a brand with a price deemed too high.

Processors are pushing back too in some cases. Hain Celestial Group said that it recently cut off some European food retailers from a certain product when they refused a price increase; those retailers eventually gave in.

The tenseness in the situation probably won’t go away soon. “Retailers’ job is to protect the consumer,” Kellogg CEO Steve Cahillane said in remarks quoted by the Journal. “Our job is to protect our margins.”

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