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There's likely truth in that. People at both Safeway and Giant (big local chain) have told me the same thing, they'll order X units but only get X-y.
Thank you. It's been 19 years since we left Fairfax County, VA but we fondly remember Giant Food. Part of the issue with my Safeway is less than stellar choices by corporate suits on what to stock and how much of it. This store stocks one row of heavy whipping cream, just one row, but the same cold case has FOUR full shelves of coffee creamers. At holiday time this Safeway sells out of heavy whipping cream (duh) but I've never seen it sell out of coffee creamers. I have to go to Sprouts or Fry's where they have a lot of whipping cream.
The same store had four rows of big plastic bags for roasting turkeys - in March. Turkey cooking season is mostly NOV-DEC. And they don't even stock the Zip-Lock plastic bags for microwaving veggies, for that I have to visit Wal-Mart, but they have four rows of turkey roasting bags. Can't figure this out. Every recipe I have which calls for onions always calls for a medium onion. No such thing at my Safeway, all the yellow onions are jumbo, the size of a softball.
These mismatches and stock-outs are a management issue. But I've been digressing. Back to the topic.
Some of this inflation is honest; wages went up for a lot of people due to the "great resignation" the other year, and a lot of new union contracts contain hefty wage increases. Teamsters at UPS got a great pay raise last summer. Some retailers are starting to unionize too, like some Starbucks locations and some Amazon warehouses.
Some inflation was due to a huge run up in over-ocean shipping charges. The pre-pandemic charge for a container from China to the USA was about $4k but during the supply chain frenzy the price went up to about $20k per container -- if you could find an container empty to load and a ship with a berth for it. Railroads haul these containers east, from the west coast ports of Long Beach, Los Angeles, etc, and rail wages have gone up so they charge more to move them and that shows up as price inflation in any number of goods.
To prove it was just greed is going to take significant forensic analysis of corporate purchasing and pricing records to see if their cost inputs really did go up enough to justify inflated prices, and getting that data will be nearly impossible to get without Congressional subpoena power or investigative reporting that only a few newspapers or media networks in the country still have the staff to do well and with validity.
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I noticed that some grocery items have gone up fifty percent! Honestly, I think that's sort of ridiculous. Justify it any way you want, but it's too much. I think those companies are probably often making record profits.
We'll find that out through their year end earnings reports!
Use to be the market/competition would keep prices in check
Also there was a “ fairness In business “ attitude that if you screwed the customer eventually
That’d be found out and you’d go out of business
But because of hyper inflation and this economy
That utilities, taxes, payrolls , have gone up 30-50%
Businesses/contractors are “getting what they can” for goods or services
Competition kept most everyone in check… but because of government over reach
Theirs a totally different perspective
We'll find that out through their year end earnings reports!
Shouldn't that tell us something?
Yes and no. If prices, and costs, double, then, if net percentage of profits stay the same, let's say 2%, then the "profits" number will also double. But it's stayed at the same level in relation to revenues. But it will be spun as a "record" and "doubling".
Oil companies run into this all the time when oil prices go up.
Yes and no. If prices, and costs, double, then, if net percentage of profits stay the same, let's say 2%, then the "profits" number will also double. But it's stayed at the same level in relation to revenues. But it will be spun as a "record" and "doubling".
Oil companies run into this all the time when oil prices go up.
To the last statement I should have added that results because of the tax code and accounting practices where, if an oil company has oil in inventory of, say, 50M barrels bought at $40/barrel and the market price increases to $50/barrel then those reserves are now counted at the new, higher price (and sold for that).
If you keep up with inflation then every year should be a record year…of profits or wages. You likely don’t make the same salary you made 20 years ago or even 5. Inflation reduces the purchasing power of money so earning must go up to maintain your purchasing power. Ie just to stay even.
The worldwide covid epidemic seemed to play havoc on almost every aspect of life, including this economic aspect. It seemed to breakthrough the "guardrails" of our general economic thinking. And it just seems as if things have snowballed.
It was not the pandemic. It was largely governmental response to the pandemic.
Some governmental responses were good; others, in hindsight, were extremely flawed. In hindsight, we know the shutdowns were a mistake. They were based on an influential initial study of projected mortality at University College London - which we now know was full of computer programming errors, database errors, and errors in the specification of mathematical models. In hindsight, had the University College London study been accurate and not subject to analytical flaws, then the important University of Chicago study on the economic effects of a shutdown compared to not shutting down would have been different, and our government likely would not have shut down the economy at all.
Another example of governmental response that, in hindsight, we know was flawed was the $5 Trillion Helicopter Drop coupled with politician's mantra to never let a good crisis go to waste.
The end result was the unnecessary inflation the economy suffered, coupled with economic distortions such as a precipitous drop in the civilian labor force participation rate that has caused so much economic harm to the country.
Without smoking-gun evidence we can't know for sure if companies jack up prices 'just because' others are, but it can sure seem like it.
A Harvard Business School alum wrote a book about his experiences at HBS, including his first day in introductory price theory. There was assigned reading, of course, but he hadn't read the case - a BIG mistake. We'll call the alum Mr. XXX.
The case was about a retailer selling bicycle sprockets. It was full of charts and tables of all manner of data on overhead costs, insurance costs, rent, labor costs, hours of operation, electricity costs, security costs, etc etc etc. The professor called on a student at random to summarize the case, then a different student at random to point out the key elements.
Then the professor called on random students to ask them what would they do. Each student replied with confidence summarizing their analysis and recommendation. The professor would then go on to another student asking the same thing.
Then, by random chance, the professor called on the author of the book (Mr. XXX) - who, as I said, hadn't read the case.
"Mr. XXX, how would you price the bicycle sprockets given all this data? Do you agree with the other students or do you disagree and why?"
The author knew he was screwed - he didn't have a clue. He bit his lip, mumbled a bit, and the professor pounced on him "Speak up, Mr. XXX, the class wants to know the results of your in-depth analysis. What would you do???"
Mr XXX finally stammered, "Uh, I'd call up 4 competitors on the telephone, ask what they charge, and then price our sprockets a penny less than the lowest price."
The class went into a hushed silence. Then there were whispers that he wasn't considering any of the data and in his analysis.
The professor stared at him for what seemed like an eternity.
Mr. XXX started to expect the professor was going to eject him from class.
The professor addressed the entire class, "THAT is the correct answer. None of the rest of you were even close. None of the charts or tables of data matter. What matters is what your competitors charge."
Then the professor said, "I've never done this ever. We have 30 minutes left in today's class, but we have nothing else to talk about. Mr. XXX nailed it completely. Class Dismissed."
Thank you. It's been 19 years since we left Fairfax County, VA but we fondly remember Giant Food. Part of the issue with my Safeway is less than stellar choices by corporate suits on what to stock and how much of it. This store stocks one row of heavy whipping cream, just one row, but the same cold case has FOUR full shelves of coffee creamers. At holiday time this Safeway sells out of heavy whipping cream (duh) but I've never seen it sell out of coffee creamers. I have to go to Sprouts or Fry's where they have a lot of whipping cream.
...
Corporate suits allow vendors to take up more shelf space by charging the vendor accordingly, who is all too happy to pay the "shelf rent" in order to have more visual coverage. Therefore, the higher-selling whipping cream may only be at one facing, and the lower seller gets 3 facings. At the same, there are restrictions to the dairy manager as to how much backstock they are permitted to keep. So they run out of more popular, single-faced whipping cream.
It was not the pandemic. It was largely governmental response to the pandemic.
Some governmental responses were good; others, in hindsight, were extremely flawed. In hindsight, we know the shutdowns were a mistake. They were based on an influential initial study of projected mortality at University College London - which we now know was full of computer programming errors, database errors, and errors in the specification of mathematical models. In hindsight, had the University College London study been accurate and not subject to analytical flaws, then the important University of Chicago study on the economic effects of a shutdown compared to not shutting down would have been different, and our government likely would not have shut down the economy at all.
Another example of governmental response that, in hindsight, we know was flawed was the $5 Trillion Helicopter Drop coupled with politician's mantra to never let a good crisis go to waste.
The end result was the unnecessary inflation the economy suffered, coupled with economic distortions such as a precipitous drop in the civilian labor force participation rate that has caused so much economic harm to the country.
It was self-inflicted.
In the end, the most important thing is what did not happen. We lost 1,000,000 people due to Covid. We were on track to lose another 3,000,000 if we did nothing at all. The money spent pales in comparison to that.
It really wasn't clear what to do in the beginning. The President's best course of action was to rely on agencies like CDC for advice.
You make mistakes. You learn from them. You try not repeat them.
I disagree that the stimulus money should not have been given. PPP kept thousands of small businesses on their feet. Stimulus checks and enhanced unemployment benefits kept many people from suffering utter destitution. I assume this is what you referencing with the "$5 trillion helicopter drop".
Some argue "well it should have been more fine-tuned". This type of attitude fails to understand politics. Policy isn't made by college professors trained in years of economics and statistics. Its made by people who have to stand for election every two, four, or six years and have constituents who need help in an emergency. Had we tried to fine-tune everything no bill would ever have passed Congress.
Life is a dance that you learn as you go.
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