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Costco Chief Financial Officer Richard Galanti is warning about exceedingly difficult times for U.S. consumers as food inflation is expected to continue to worsen all over the country. At the warehouse chain, shoppers are noticing explosive prices across a series of everyday items right now, and that will continue to be the norm for the rest of the year and into 2024. New reports reveal price hikes of up to 70% in some key categories.
Meanwhile, some shelves remain empty at the retailer’s stores, That’s why, in today’s video, we decided to track the grocery products facing the steepest price increases in recent weeks and months, and which ones are still in short supply at Costco so you can prepare for the challenging environment that lies ahead.
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Over the past year, it has been hard to overlook the fact that the cost of everything from produce to baked goods to dairy products increased at Costco warehouses. But new reports show that this trend has intensified in recent months, and analysts at GoBankingRates say that a new round of price hikes was just introduced in the company’s system, that’s why staying aware and prepared is key.
Since April, price tag changes of 30% up to 70% were observed at the chain’s warehouses, according to Julie Ramhold, an industry expert with DealNews.com. That was also true in May, and June, with a flood of consumer reports confirming the trend. The report also notes that the most shocking price hikes occurred in the meat category, which includes beef, pork, poultry, and fish.
Right now, four-pound packs of Costco’s Kirkland Signature Sliced Bacon are selling for $21.99, up from $16.99 just a couple of months ago, Ramhold points out. Another user noted in May that ground beef prices soared to $25.99 at Costco, while the same product was selling for $19.49 at Aldi. The steepest price increase was observed on King Crab prices, which shoot up from $22.99/lb to $38.99/lb, a whopping 70% surge.
At the same time, dairy products and eggs continue to face empty shelves at Costco warehouses, and prices are rising faster than at other big-box stores. For lots of people out there, these higher prices mean they can no longer afford to shop at Costco. Although you can still find deals for certain products, the cost of basic staples is reaching record levels.
Data shared by Bloomberg reveals that those price hikes are already hurting Costco’s bottom line. In May, the company’s sales declined for the third straight month as US consumers fled to cheaper stores.In June, the company’s Chief Financial Officer Richard Galanti warned about exceedingly difficult times for US consumers.
He said he has seen a significant share of customers switching from purchases of beef products to less expensive choices, like pork and chicken. He highlighted that typically observes this trend historically during times when the US entered a recession in the past.
Galanti’s cautious tone scared investors, who were already concerned about the company’s rising prices, supply chain problems, and slowing sales. That pushed Costco stock down 20% from March levels.
With crazy-high prices turning more and more customers away, turbulence is coming for the warehouse chain. But before things start spiraling out of control, don’t forget to check for deals and get ready for the inflationary crisis at major grocery stores in the months ahead.
Article and video cross-posted from Epic Economist.