Some large U.S. suppliers and restaurants, including Kraft Heinz and McDonald’s, have indicated they will continue to raise prices as they face unexpectedly higher costs, reports The Wall Street Journal.
Chief sales officer of Kraft Heinz, Cory Onell, wrote in a memo to retailers that inflation continues to affect the economy, as well as shape consumption patterns. Persistent costs and increases necessitate price changes.
The Labor Department noted on Friday that grocery prices rose 11.9 percent in May versus the previous year, and prices increased on average 7.4 percent at restaurants and food venues. Both statistics mark the biggest price jump in over 40 years.
In an investor conference on Thursday, Ian Borden, head of McDonald’s international business said that the company is studying the impact of price increases to ensure that they aren’t too dramatic for customers.
“We have the approach that we want to do more frequent increases but at smaller levels,” Borden said. According to The Wall Street Journal, some McDonald’s restaurant owners have explained that fuel is one of the main culprits for rapidly escalating costs.
Higher prices for animal feed, freight, and labor have caused Tyson to increase beef prices by an average of 24 percent over a three-month period.
Many companies are trying to find ways to offset inflation and mitigate price increases: selling small packages for a higher price per ounce or finding in-house methods to save money by optimizing operations.
Shake Sack[s CEO said at an investor conference Tuesday, “Inflation is real, and it’s not going to get any better any time soon in the restaurant business,” painting a bleak outlook toward prices in the near future. Full Story (Subscription Required)
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