Dear ABMInsider,
Do you ever get the feeling that some businesses are taking advantage of inflation to engage in price gouging?
Earlier this year, our Devil’s Advocate columnist John Risley announced that inflation isn’t coming — it’s here. The pandemic, coupled with massive public spending and increasing climate demands, exacerbated by Russia’s war on Ukraine; they all combined in a massive shit storm of skyrocketing cost-of-living costs. It’s negative supply and demand economics at its worst: decreased supply and unmet demand mean that consumers have to wait longer and pay more.
Here in NL, we saw gas soar to over $2/litre (it cost me $105 to fill up my car… not a truck, mind you… a midsize four-door car). Speaking of vehicles, this is definitely not the time to buy. Dealerships are struggling to get cars on the lot and new vehicle buyers report having to wait weeks, if not months, for delivery. In May of this year, Global News reported that the vehicle shortage will likely extend into 2023. Forget about having choice over colour or haggling for the best deal; if you need something now, you’ll take what you can get and count yourself lucky to have it.
At the grocery story, virtually every item on store shelves has increased by at least a dollar. And those dollars add up, quickly.
Just last week, I stopped into the supermarket on my way home to buy some chicken for supper and a few other miscellaneous items for the company I had coming to visit. A brandless bottle of dipping sauce cost me $4.50 (it was the cheapest one on the shelf). Two 150-gram packages — three-quarters of a cup — of pizza toppings (sausage and bacon) cost $4.99 each. I used to get a full pound of bacon for that price. Speaking of which, how you seen how much bacon costs these days? It’s like the grocery store gold standard. AND the packages are smaller (down from 500 to 375 grams). Jeez Louise!
Collectively, consumers respond by staying home more and buying less. But as the trend continues, you can’t help but wonder if some folks aren’t… well… taking advantage of the situation.
Seems like prices on inventoried products increase overnight because of something that happened on the other side of the world but take exponentially longer to move in the other direction. Did they really need to go up so quickly? Did the retailer(s) really need to drag their heels that long to make products more affordable?
To put it bluntly, consumers are not happy. More than that, they’re feeling hard done by, as evidenced by reaction to Loblaw’s announcement that they were freezing prices on their No Name products for three months. You’d think that a 90-day commitment to holding the line on prices would be a good thing. But some, including federal NDP leader Jagmeet Singh, have described grocery store profits as “corporate greed”.
I have no proof that there’s any actual price gouging going on. I just know that desperate times, and desperate people, often lead to desperate measures. I can only hope things stabilize before we get that far.
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Dawn Chafe Executive editor & co-owner dchafe@atlanticbusinessmagazine.ca |
