$5 Gas Gallon… Grocery Prices at Tipping Point…Biden Caves to Unions Again, Sabotaging Consumers…

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Inflation Is Approaching a Tipping Point at the Grocery Store

Confident consumers have swallowed higher supermarket prices so far this year, but the risk of indigestion is growing. For companies that make staple goods, asking for more money is delicate.

On Wednesday, the world’s biggest food company Nestlé NSRGY 2.82% said sales increased by an impressive 6.5% in the third quarter compared with the same period last year. Demand for its products is strong and Nestlé has been able to pass on the higher cost of inputs such as plastic and transport to shoppers, a sign of healthy pricing power. The company’s shares were up 3% in early trading.

Nestlé’s costs of goods sold will increase by around 4% this year, meaning it will shell out an extra 1.8 billion Swiss Francs, equivalent to $1.95 billion, on everything from packaging to trucking. Dannon yogurt-maker Danone said Tuesday that its input costs will be 8% higher this year. The difference can probably be explained by what the two companies sell. Nestlé has a big coffee business where hedges have protected it from spiraling commodity costs, although these will roll off soon.

Gas Prices Climb, No Relief Before The Holidays

If you’re wondering when prices at the gas pump will start leveling off, don’t expect that to happen anytime soon.

American motorists are paying, on average, $3.28 a gallon for self-serve regular as of Wednesday (Oct. 13), according to tracking services such as AAA and GasBuddy. That’s up more than 10 cents over the past month and by over a dollar compared to October 2020. In parts of Florida, Hawaii and California spikes have hit $5 a gallon.

High Prices Are Bad News for Big SUVs, Pickups
Already, October prices are 44% higher than the average cost of gasoline was in 2020. When fuel prices jump quickly, automakers find that buyers tend to delay plans to buy bigger SUVs or pickups, or shift to smaller vehicles, to hybrids and to EVs. With the shortage of new vehicles of all kinds, the shift is less likely in 2021.

“High fuel costs help accelerate” the switch from gas-powered vehicles to EVs, Brent Gruber, J.D. Power’s senior director of global automotive, said during a media webinar Tuesday. Rising pump prices, combined with a growing line-up of products, could help boost EV sales in the U.S., he added, though likely not to the degree the shift has gained traction in the UK.

Biden Caves to Unions Again, Sabotaging Consumers…

From Christmas toys to clothing and auto parts, shortages of imported products are forcing factories to idle, store shelves to sit empty and consumers to panic.

What else is in short supply? The truth about what’s causing this economic crisis.

President Joe Biden, who brags about running “the most pro-union administration in history,” won’t admit that longshoremen’s unions are holding the nation hostage, refusing to allow the use of automated equipment to unload container ships and get the goods onto trucks faster.

The U.S. is the world’s largest importer, but its major ports at Los Angeles and Long Beach, California, rank a dismal 328 and 333, respectively, in the World Bank’s Container Port Performance Index. That means nightmare inefficiency worse than most developing countries. Not one U.S. port made it into the top 50 for speed and efficiency. In contrast, Japan’s Yokohama port ranks No. 1.

Nearly 100 container ships have been waiting off the Los Angeles coastline to be unloaded. The longer they wait, the more prices for imported goods rise, clobbering consumers.

 

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