For some items, prices are expected to increase by about 20% early next year.
The wholesaler shared General Mills letters with CNN Business on condition of anonymity to protect the company’s relationships with suppliers. A company official said it plans to push all of the increases to grocery and convenience store customers. He hopes they will then pass them on to shoppers.
A spokesman for General Mills was not available for comment for this story.
If more of General Mills’ customers — including big box stores, supermarkets, drug stores, and other chains in the United States — decide to do so, these familiar brands will be more expensive for buyers. shop.
Price increase
Grocery prices have surged during the pandemic, after stagnating between 2015 and 2019. Prices were up 1% in October from September and 5.4% higher than the same time last year, according to the latest data from the Bureau of Labor Statistics.
Inflation for food, beverage and household goods will accelerate to 8% in the first half of 2022 before settling at 4% in the second half, according to a project by market research firm IRI. IRI tracks price, point of sale and volume data, promotions and trends at big box stores, wholesale clubs, supermarkets, pharmacies and other consumer channels.
Food manufacturers and grocery store chains have faced higher costs of goods, labor, transportation and other costs during the pandemic. Those costs have escalated in recent months, prompting them to raise prices to mitigate the impact.
The producer price index, which measures the prices producers receive for their goods and services, rose 0.6 percent last month from September and up 8.6 percent year-on-year.
In the letters, General Mills said it was responding to higher raw material and labor costs.
“The current operating environment is as dynamic as we have been for at least a decade, resulting in significant input cost inflation, labor shortages and operational challenges,” General Mills said. business”.
In September, General Mills said it expected input cost inflation to be between 7% and 8% for fiscal 2022.
Uneven impact
“Inflation has been more painful for lower-income households,” Bank of America economists said in a research note last week. That’s because they’re more exposed to the fastest-rising commodities, such as gas and rent, and they save less than higher-income groups.
Some grocery chains are raising prices faster than their competitors, depending on how flexible they are to handle the higher costs.
