The world’s largest food producer says consumers can expect prices to rise thru '23

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Grocery shoppers can expect more private label brands to try and keep prices low

Despite inflation starting to slow down, we shouldn’t expect the entire spectrum to cave and get back to days of a dozen eggs or loaf of bread for 99 cents. In fact, the world’s biggest food company – Nestlé – says the price that consumers will pay for staples will jump even higher this year.

In an earnings call, company CEO Mark Schneider said that consumers aren’t the only ones feeling the pinch, either.

“We are still in a situation where we’re repairing our gross margin and, like all the consumers around the world, we’ve been hit by inflation and now we’re trying to repair the damage that has been done,” he said.

Schneider didn't let Nestlé off the hook, either. He was candid in saying that the company boosted prices by 8.2% in 2022, but it could’ve been worse because that eight-point jump was far from offsetting Nestlé’s own costs.

Schneider didn’t go through a punch list of how his company’s 2,000 products would be priced going forward, but did say that it’s not making broad-based price increases, but very targeted by category and situation. 

Grocers trying to stem the tide

Grocers are walking on eggshells, too. Whole Foods, Hy-Vee, and Walmart are reportedly encouraging their major suppliers to bring prices back down to an acceptable level. The much smaller regional grocer Hy-Vee said it and some of its peers are doing the same.

Some of the grocer-side assistance will likely include private label brands – such as the “Kirkland” brands that Costco offers and almost everything inside an Aldi or Trader Joe’s. Bank of America Research said private labels accounted for 21.9% of total food sales at the end of 2022, up a tad from 2021.

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