Grocery prices climbing, analysts can only speculate when inflation will stabilize
SALT LAKE CITY — Sticker shock over prices at the grocery store.
We’ve all seen how quickly our grocery bills have climbed in recent months as inflation drives the cost of everyday items way up. Some economic analysts say they can only speculate on when this will end.
Wholesalers say grocery prices pinch everyone
Nicholas and Company is a wholesale distributor that delivers food to restaurants, schools, government institutions and prisons, and they’re seeing the inflation problem from multiple sides. Co-CEO Nicole Mouskondis says, at the core, it’s the classic scenario of supply and demand, with demand going up and supply crashing down. For instance, she says many meat processing plants across the country are dealing with the effects of the pandemic and they don’t have as many workers as normal.
“They only, maybe, have half the number of employees in those production plants,” she said.
On top of that, Mouskondis says there’s a severe truck driver shortage. She estimates companies are short roughly 80,000 drivers, nationwide. There have been driver shortages in the past, but Mouskondis says this current one could be a lot worse than others have been.
“What’s different about this time is that we don’t have a pipeline of drivers. As drivers are aging out, we don’t have a pipeline of drivers coming in because all the truck driving schools shut down because of COVID,” according to Mouskondis.
A complex problem
Officials with the Utah Food Industry Association say they wish there was one specific problem leading to higher prices, but several different problems are combining to make one large inflation mess. President Dave Davis says the federal government made things worse by injecting more cash into the economy, which traditionally brings the value of the dollar down.
Davis says grocery stores and other retailers will frequently place items on sale to move merchandise they need to get rid of. However, he’s seeing a distinct drop in the number of promotions being organized since store owners don’t have as much merchandise to sell.
Better days ahead?
Eventually, Davis believes prices will stabilize.
“I think that many of those things are going to start to fix themselves over time.”
So, how long will that take? Davis can only speculate.
“It took us about 24 months, or so, to get into this problem that we’re in and it will probably take us at least that long to get out,” he said.
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