So, Sally, when we take a look at the latest term in our food world, it's greedflation. It has nothing to do with consumers, but it has everything to do with retailers saying to brands, Hey, you're getting a little greedy here. Chairman of Tesco, John Allen said it is entirely possible that some food firms are profiteering from inflation at the cost of some of the poorest consumers.
Phil: He also said that he told the BBC that Tesco's had a falling out with a number of suppliers following discussions over price hikes that the supermarket has challenged, they've created a new team to monitor food, import input costs against price rises. They're challenging companies that it believes are lifting prices disproportionately. We saw this a few years ago, pre pandemic between the fight between Campbell Soup and Walmart. And in fact, Walmart said, we're not gonna take the price increase, Campbell Soup sales overall, not just at Walmart, but overall as a result of Walmart taking Campbell's products off their shelves, which have still gone is down 2%. In this morning's, Washington Post is a great story by Jacqueline Pizer that talks about this stores are pushing vendors to cut prices, but your bill, obviously talking to consumers, will stay the same. And whether it's a target, whether it's a giant eagle, all the big players, retail players are pushing the CPG companies to reduce costs. And what do you think is gonna happen here? Who wins?
Sally: Well, the other side of it is that some consumer groups are reporting, you know, that retailers are passing the buck to these brands, and that actually they're raising their own brands, their store brands more than these other brands that are coming in. There definitely, should be, there's reason to believe that there should be more of a conversation happening between these retailers and these brands on how to make these products more affordable for their shoppers. We've gotta think about the shoppers. And I wanna tell you, Phil, yesterday I was in Kroger and as I was shopping. I passed an elderly man who was shopping and he had a very, very stressed look on his face. And he looked at me and he said, I don't know how I'm gonna make it. I don't know how I'm gonna buy food. And I think retailers and, and brands need to really pay attention to how much shoppers are hurting.
Phil: Absolutely. You know, there, there's no question about it. And also smaller brands, what's in this Washington Post article also talks about the fact that Nestle, Kraft and J and J, they can, they can survive the hit. But, you know, most small businesses can't, and they risk losing their spots on the supermarket shelves as they engage in these fights with retailers to take product off shelves. Also the bottom line is that they're replacing it with private label. And to your point, now, these are UK numbers, but there's something called the Supermarket Inflation Tracker, by the name of which, with a question mark at the end, they found that branded items had a lower inflation rate than that of supermarket's own label items in the uk in the three months to December, 2022, price of own store label brands rose 18.3% over the year, compared to 12.3% for branded items.
Phil: So when we look at this fight that's gonna take place, and I don't think it's anywhere near over, I think we're gonna see a lot of consumers get hurt. I think we're gonna see a lot of small brands get hurt, and, you know, these big guys at the top are gonna be, you know, going at it. And hopefully we can have some price, especially as inflation is going down. We've got a better system now in place. We have oil down, so packaging prices are down. So hopefully, you know, I don't think we're gonna see price decreases, but if we can just have 'em level off, that would be a great thing.