Next year, General Mills will raise prices on hundreds of products.
The inflation rate for consumers reached 6.2% in the United States during the month of October, and food companies such as General Mills are passing their higher input costs on to consumers.
CNN Business reported:
General Mills (GIS) notified retail customers that it’s raising prices in mid-January on hundreds of items across dozens of brands. They include Annie’s, Progresso, Yoplait, Fruit Roll-Ups, Betty Crocker, Pillsbury, Cheerios, Cinnamon Toast Crunch, Lucky Charm’s, Wheaties, Reese’s Puffs, Trix and more, according to letters General Mills sent to at least one major regional wholesale supplier last week.
For some items, prices will go up by around 20% beginning next year.
The wholesaler shared General Mills’ letters with CNN Business on the condition of anonymity to protect the company’s relationship with its suppliers. A leader at the company said it plans to push along all of the increases to its grocery and convenience store customers. He expects they will then pass them down to shoppers.
Along with General Mills, Tyson Foods — the second-largest meat and poultry producer in the United States — is raising prices to deal with the “accelerating and unprecedented inflation” threatening all of its business units.
“I can’t think of a single thing that has either stayed the same or gone down,” said Tyson chief executive Donnie King, referring to rising input costs.
“The inflation we incur needs to be passed on,” added chief financial officer Stewart Glendinning. “Some of the inflation for us has been substantial.”
Likewise, Goya Foods CEO Bob Unanue told Fox Business that “inflation is here to stay at least for a good while and everybody has these costs.” He noted that costs for packaging materials “have gone way up” due to the supply chain crisis, while labor shortages force the company to operate “with less people.”
Over the summer, Nestlé chief executive Mark Schneider said that “what we’ve seen this year is some kind of a turning point, where after several years of low inflation, all of a sudden it accelerated very strongly.” Though he expressed hope that higher inflation would be transitory, the world’s largest food and beverage company increased prices by 2% to offset cost increases of 4%.
Despite several consumer-facing brands hiking their prices, the United States Census Bureau announced last week that American retail and food services sales rose by 1.7% between September and October.
The Wall Street Journal reported:
The combination of strong demand, snarled supply chains, higher prices and an unbalanced labor market is making for an unusual holiday season where record sales may be accompanied by shortages and long waits for goods. Inflation may also start to cut into demand for consumers with lower incomes who may put off purchases due to price increases, economists say…
Retail sales figures aren’t adjusted for inflation, so some of the increase can be attributed to higher prices.
Overall, the higher food prices are culminating in a historically expensive Thanksgiving holiday. According to the American Farm Bureau Federation, a lobbying group representing the American agriculture sector, the average cost of a Thanksgiving meal for 10 people will be $53.31 in 2021 — representing a 14% price hike in a single year. The price of turkey has increased by 24%.