Consumers are increasingly pushing back against price increases – and winning

https://thegrio.com/2024/02/25/consumers-respond-to-price-increases/

by pg_1234 • 2 years ago

67 117 2 years ago

delecti• 2 years ago

That headline is a weirdly empowering framing considering the article is closer to "people can't afford the things they bought 4 years ago."

readthenotes1• 2 years ago

At least the 20% inflation rate is underestimated

quxbar• 2 years ago

Economists like Paul Krugman are using a SURVEY of people asking them what they spent (for a NON FIXED basket of goods).

Let's say that you used to eat 10 units of grains ($1 each) and 5 units of beef ($5 each), for total spending of $35.

Let's now say that prices doubled (grains $2, beef $10).

You can't afford $70, so you adjust your consumption patterns and replace 2 units of beef with 2 units of grain (cutting your beef consumption in half).

We have now replicated the graph that Krugman so proudly showed off.

"Food at home" prices are "only" up ~25%.

Paraphrased and copy-pasted from here: https://twitter.com/MorlockP/status/1761782081351196814

HumblyTossed3• 2 years ago

I don’t know what you’re downvoted. I have a curated list of recipes I have been cycling through over the past 6 or 7 years. They’re things I like to cook and the family likes to eat. Two years ago we consistently spent about $110 per week on groceries. We are now consistently spending about $140 per week.

geor9e2• 2 years ago

I say cereal, you say dinner! https://www.youtube.com/watch?v=U8Dw1bjRxY0

krackers• 2 years ago

I'm always amazed that what's effectively a dessert is allowed to be marketed and sold as a breakfast food.

costanzaDynasty• 2 years ago

Almost everything that is advertised is something you don’t need. Whether it’s media, or food or something else, never push the consumer to the point that they realize they don’t need you. Pigs eat, hogs get slaughtered.

fuzzfactor11• 2 years ago

A corollary is where a large bulk of ads are for products that are completely economically inadvisable for consumption on average citizens' incomes.

So much is geared toward uber-consumers who have way more funds that can be considered disposable.

superkuh3• 2 years ago

Most consumers have now long since spent the savings they built up during the pandemic.

Is this supposed to be comedy? Most people did not become more well off during the early years of the pandemic.

I wish we could exercise the same choice (branded vs generic) in the ISP utility we chose to pay for. For me it's either 56k or Comcast cable. I'm on the same comcast plan as I signed up for in 2012 (80/5 for $78/mo total with modem rental then) and it's not only gone up in price by over 1/3 but the service has decreased in quality too. When I signed up I had unlimited data transfer. Now I'm repeatedly paying $10/50GB "overage fees" on my 1.2 TB/mo allowed data transfer. And my speed has not increased at all, still 80/5. Only now I pay $106/mo (w/modem rental).

You could argue internet is not essential to live like food. It really isn't. But it sure is hard to live without.

tzs• 2 years ago

Now I'm repeatedly paying $10/50GB "overage fees" on my 1.2 TB/mo allowed data transfer. And my speed has not increased at all, still 80/5. Only now I pay $106/mo (w/modem rental).

If you aren't using your own modem it is usually worth adding unlimited data if you are repeatedly going over your cap.

It's normally $30/month, but if you rent their modem it is only $10/month more to add unlimited [1].

[1] https://www.xfinity.com/learn/internet-service/xfi-complete

nebula88047• 2 years ago

I can't seem to figure out the angle? Whats the scam they are running? There is always a scam.

Is the modem collecting data? Are they hoping you'll use their streaming service and then gouge you later once you are addicted?

It can't just be that they give you unlimited bandwidth just to get you to pay a bit more for their modem. They could make so much more money by just charging for the 50GB like what OP pays.

giantg26• 2 years ago

What are you doing that you're using more than 1.2TB/mo, and at only 80MB/sec no less?

I set Netflix to a lower resolution to save on bandwidth. As a secondary effect I don't think I ever go over 250GB per month, even downloading games, datasets, etc.

xnx3• 2 years ago

I use a lot of bandwidth backing up photos and videos to the cloud.

dbspin• 2 years ago

As ordinary subscribers, not crippling Netflix or Youtube resolution, torrenting a moderate amount of movies, downloading games etc, my partner and I regularly go over 1TB a month. I don't think that's particularly unusual. But our internet isn't metered (nor of course should it be, considering large ISPs all have peering arrangements and fixed cost leased lines).

Dylan168073• 2 years ago

Well maybe they don't want a lower resolution.

One person leaving a twitch stream on during working hours would use up more than half that budget.

and at only 80MB/sec

1.2TB is only 5% utilization of the connection on average.

superkuh3• 2 years ago

and at only 80MB/sec no less?

Lol, I wish I had 80MB/s. No, cable ratings are given in megabits. I get 10MB/s max. But that's not the only relevant number. I'm always uploading. And re: download, those 25GB large language models I've been testing this last year have been eating a lot.

But really I'm just constantly using a small amounts because I participate in the internet rather than use centralized services (and even host my dot com from home). 1.2 TB both up/down + comcast internal overhead goes fast. That only about 400KB/s average.

nebula88047• 2 years ago

Its 2024. Google Fi is serving some cities with 8Gb/s symmetrical. The internet has been around long enough that OP should be able to saturate the connection for anything he/she wants no questions asked. Its literally pulses of light going through a strand of fiber. It is not even matter just photons! They are paying for photons!

Full_Clark• 2 years ago

Where does the leverage lie with breaking down ISP monopolies? Is it a product of regulation at the municipal level, or state laws, or federal regulations?

It doesn't seem like a situation that's going to be improved by consumers complaining about the ISPs. For example, Comcast is consistently derided for poor service and has ranked as one of the most unpopular brands in the US as early as 2010.

Is there even a prospect of competition if the regulatory picture changed, or is it just too capital-intensive to roll out new infrastructure and bring a competing service to market?

nebula88047• 2 years ago

Voting in better representatives. Almost all of our problems stem from money in politics.

metaphor2• 2 years ago

same comcast plan as I signed up for in 2012 (80/5 for $78/mo total with modem rental then)
Only now I pay $106/mo (w/modem rental).

The price you're paying today has merely tracked nominal inflation relative to the price you were paying 12 years ago[1].

[1] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=78&year1=20120...

xnx3• 2 years ago

Tech should get cheaper and faster every year.

chgs• 2 years ago

In competitive markets prices have collapsed. US domestic internet appears to be very uncompetitive.

noduerme• 2 years ago

I feel lucky to live in a CenturyLink market. I got in at $70/mo. for gigabit fiber, unlimited, lifetime rate that never goes up. I think it's still only $75/mo. for the same plan now. There's some initial setup and modem fee. It's a great deal all told.

BenjiWiebe• 2 years ago

And in this CenturyLink market (now split off as Brightspeed) the available speeds went from 10Mbps DSL to 3Mbps in the last couple years.

rcornea• 2 years ago

OP's link redirects me straight to google.com, possible request overload

i found the same title at Associated Press: https://apnews.com/article/inflation-consumers-price-gouging...

metaphor2• 2 years ago

The AP source is the original; recommend updating submission to this since it properly links to some critical cites that the original submission omits for some reason, e.g.

And in a March 2023 research paper, the economist Isabella Weber at the University of Massachusetts, Amherst, referred to it as “seller’s inflation.”

...which links to this absolute must read paper[1].

[1] https://scholarworks.umass.edu/econ_workingpaper/343/

Aurornis• 2 years ago

I’m really fascinated with the way journalists are trying to turn the most basic supply and demand situation into “fighting back”.

In grocery stores, they’re shifting away from name brands to store-brand items, switching to discount stores or simply buying fewer items like snacks or gourmet foods.

Like everything must be a war between two sides. It can’t simply be the most basic economic concept at work.

On the other hand, I’m equally surprised at how few people seem to understand supply and demand has influence on prices. I watched as some family members complained loudly about how concert prices were outrageous and unaffordable for the average person like them, then went right on ahead and then bought the tickets they wanted anyway. They didn’t understand that people’s willingness to pay uncomfortably high prices was the entire reason tickets were so expensive.

I watched the same thing happen at the grocery store earlier where a couple picked up a package of steaks, lamented that it was going to cost them X hours of work, and then threw them in the basket anyway. It’s like large parts of the population are on purchasing autopilot and the price barely matters.

I think it speaks volumes to how high our standard of living has been if we think that it’s newsworthy that some people are switching to store-brand foods or buying fewer gourmet food items (quoted from the article above). Of course, the people suffering the most are the ones who have had to buy store brand foods and avoid gourmet luxuries long before inflation kicked in.

duxup• 2 years ago

I generally agree with your statement, but I'll add that "Like everything must be a war between two sides." people seem to love that concept too. If they're not identifying with what they buy, it's with what they don't buy and so on.

It's a bummer because I want to know about what people enjoy, like, not what they hate or dislike. So often it is the latter. I somewhat blame social media as outrage and anger gets more engagement than anything else it seems and folks seem conditioned to express that more often than something ... nicer.

Lammy• 2 years ago

A lot of people probably don't even realize they're doing it. This stuff is drilled into our heads from the time of our very earliest memories. Red versus blue, the farthest two things can be apart from each other while still being the same sense to us (visible light).

When you're a kid it's blue toy aisle versus pink toy aisle. SEGA (blue logo / mascot) — or I guess Playstation these days — versus Nintendo (red logo / mascot). Coke versus Pepsi.

As we reach adulthood we're primed for duality in a way that makes us think we must choose one way or the other when presented some choice we didn't even ask for. Do I shop at Walmart, or Target? Do I vote Democrat, or Republican? Do I watch CNN, or Fox? Do I use iPhone, or Android? Do I take the Blue Pill, or the Red Pill? By the time one has been coerced into the decision they've already lost. The only winning move is not to play :)

selcuka• 2 years ago

I watched the same thing happen at the grocery store earlier where a couple picked up a package of steaks, lamented that it was going to cost them X hours of work, and then threw them in the basket anyway.

What are they supposed to do? Meat is generally considered an inelastic good [1] unlike your concert example.

[1] https://en.wikipedia.org/wiki/Price_elasticity_of_demand

allturtles• 2 years ago

Eat chicken. Or ground beef. Or pork chops. Or any of the other meats that are cheaper than steak.

mertd• 2 years ago

Meat is maybe non negotiable for some folks but surely steak can be subbed with a cheaper cut, different animal etc...

Also let's not judge the shoppers in the original comment. Maybe they wanted it for a special occasion which made it less optional.

knightofmars• 2 years ago

Preface, I'm not a vegan or vegetarian. I also hunt and have killed and butchered animals for meat.

That people consider meat an inelastic good shows a cultural and commercial brainwashing. The idea that an individual or family could go without meat is practically heresy in the United States. Frankly, it's ridiculous and shows a fundamental lack of imagination and willingness to accept that reality doesn't guarantee anyone's ability to acquire cheap hamburger, chicken breasts, bacon, or any other meat.

Simulacra2• 2 years ago

Sometimes you have to get really creative to generate those clicks. That's what it's all about. Journalism is a faint echo of what it once was.

briHass2• 2 years ago

See also many of the discussions about housing costs, on HN and elsewhere. Yes, housing is expensive, but somebody keeps paying those prices. Boogymen like private equity and landlords are often blamed, but looking at the data shows most houses are still bought by owner-occupiers.

bombcar2• 2 years ago

It’s quite rare to meet someone who wishes they paid more for their current house, or that it was now worth less.

People do notice changes, however, even if they don’t contextualize them correctly all the time.

paulryanrogers• 2 years ago

The percentage of owners is trending downward. Homelessness and renting are tending upwards.

andersa• 2 years ago

On the other hand, I’m equally surprised at how few people seem to understand supply and demand has influence on prices. I watched as some family members complained loudly about how concert prices were outrageous and unaffordable for the average person like them, then went right on ahead and then bought the tickets they wanted anyway. They didn’t understand that people’s willingness to pay uncomfortably high prices was the entire reason tickets were so expensive.

It sounds like the alternative you propose would involve... not having a ticket? That is clearly not an acceptable outcome if I want to go to the concert.

sahila2• 2 years ago

Why isn’t it acceptable? It’s the same way I want to own a yacht and a private jet but it’s too expensive so I accept that I can’t afford it.

nkrisc• 2 years ago

You don’t have to go to a concert. No one needs to go to a concert. You go if you can afford it, and you don’t go if you can’t.

Or find a free concert to go to. There’s always free music performances to be found if you know where to look.

throwaway22032• 2 years ago

The maths is pretty simple, though.

Someone like Taylor Swift has hundreds of millions of fans. There are what, maybe 50-100 tour dates a year.

The venue doesn't have a million seats.

Most of the fans aren't going, then.

HumblyTossed3• 2 years ago

This is why we are so divided as a nation. Politicians corporations have been attacking consumers and citizens since the Powell Memo. We have no true fourth estate.

nebula88047• 2 years ago

We technically do, but its behind a Substack/Youtube premium paywall. Its individual reporters going out and reporting on stories but needing people to cover their costs. Only people who can afford to support them do so and in a way they are paying for that journalism so they can have it.

I suspect this is coming for many thing that AI will automate. In the future rich people will have human performers performing for them only while everyone else has to make do with AI generated slop.

FireBeyond4• 2 years ago

So true. Disclaimer, I haven't lived there full time since 2006, but back then one of my points of pride about living in Australia was the idea that you could go to the pub with people of opposite political/social persuasions and have a positive/light/good natured talk, debate, argument about them with such things over some beers.

Here in the US, now though? There are huge swathes of people who will say, with all seriousness, "I'd rather be dead than be friends with a liberal/etc." It's so polarized. Not just teasing/smart ass as outright abusive labeling.

yieldcrv3• 2 years ago

They didn’t understand that people’s willingness to pay uncomfortably high prices was the entire reason tickets were so expensive.

this is something I found weird about how inflation was politicized.

One group said “its corporations being greedy, exclusively!” another group said “its the stimulus money in everyone’s hands, exclusively!”, centrists would say “supply chain disruptions!”

but…. capital misallocations are expected in any economic school of thinking? this means all of those politicized scapegoats are expected factors?

the part nobody wants to hear is that if you still begrudgingly bought overpriced necessities instead of starving to death in the street, then yes, you contributed to inflation. congratulations.

if corporations raised their prices and profits stayed the same, that would be the most equalized outcome.

if profits went down then there would be a case for attempting greed and failing, and if it was for withholding a necessity that would be a real case worth scrutiny!

but since they raised prices and profits went up, despite that combination being what really pissed people off the most, it means that the buyers … had more money… from… somewhere. hmmm….

ttt111999072• 2 years ago

Or used money they had saved. Or would otherwise save...

FireBeyond4• 2 years ago

another group said “its the stimulus money in everyone’s hands, exclusively!”

I mean even as recently as last month you have politicians on the right saying that people are even now "hoarding" stimulus checks, or are still living large on them.

$3,600. In 2020. That's a generous definition of hoarding. And an extremely generous definition of "living large".

novok• 2 years ago

Humans love drama. The news is mostly an entertainment medium. When your on the other side, talk about something with nuance and suck the drama out of it, you see that nobody really cares to read it compared to the dramatically colored version. Which means less ad revenue and thus less money. It's the same supply & demand you are talking about here.

I've seen it when I've written tweets, write it dramatically, engagement everywhere, write it with nuance, nobody engages.

AviationAtom• 2 years ago

Life hack: go to the box office to buy your tickets. Now suddenly they're half off.

seanmcdirmid• 2 years ago

If only. Climate pledge arena (Seattle), for example, will only sell tickets with all the Ticketmaster fees at their own in person box office, which has to be collusion, but basically the add on fees (many of which are kicked back to event organizers as simply a stealth ticket price increase) can’t be avoided.

brayhite• 2 years ago

I’m equally surprised at how few people seem to understand supply and demand has influence on prices.

Whenever this comes up about athletes and musicians, I say the same thing. I’ve watched friends lament how much money quarterbacks get compared to “heroes” aka police officers, military, firefighters, etc… yet vote against tax increases and buy sports jerseys.

bonton89• 2 years ago

I watched the same thing happen at the grocery store earlier where a couple picked up a package of steaks, lamented that it was going to cost them X hours of work, and then threw them in the basket anyway. It’s like large parts of the population are on purchasing autopilot and the price barely matters.

I used to think the shopping mall full of zombies in Dawn of the Dead was just a hamfisted critique of consumerism. But after all the complaining and not much doing I see Americans doing I think if you reanimated our corpses they would mostly go right back to shopping in a literal sense.

walterbell3• 2 years ago

Grocery store greedflation could be seen as collective producer discovery of demand curves, by dramatically spiking list prices and then slowly lowering them to find a new equilibrium above the previous stable price.

See grocery stores where 30% price increases in perishable goods lead to items sitting on the shelf until near expiry, then going "on sale" close to the original price. Over time, higher list prices are slowly reduced, in search of an optimal price to maximize revenue.

This manipulation only works when there are no defectors in the pricing cartel, otherwise non-gouging producers happily accept new customers and market share that may never return to producers enamored with algorithmic discovery of price-vs-demand curves.

What software is being used for revenue management of perishable food products? Are the algorithms similar to the software used to manage sales of perishable airline seats and "unbundling" of related benefits like seating and baggage? In a cyberpunk novel, consumers would wield OSS price discovery.

datadrivenangel• 2 years ago

People have built food price trackers to help monitor inflation. [0]

0: https://mastodon.gamedev.place/@badlogic/111071396799790275

walterbell3• 2 years ago

Thanks for that fantastic analysis of Austrian grocery stores exploring demand curves via both pricing and sizing.

It should be possible to adapt the OSS code to North American grocery supply chains, https://github.com/badlogic/heissepreise

lotsofpulp4• 2 years ago

Grocery store greedflation could be seen as collective producer discovery of demand curves, by dramatically spiking list prices and then slowly lowering them to find a new equilibrium above the previous stable price.

Yet the profit margins of the biggest grocery stores (Walmart/Kroger/Costco/Albertsons/etc) remain at 2%-3%, as they always have.

So there is no “greed”, just higher expenses, or there is massive fraud in the US’s financial sector.

Edit: to reply to below comment due to posting limit.

Kraft profit margin (11%, which was ~10% 15 years ago):

https://www.macrotrends.net/stocks/charts/KHC/kraft-heinz/pr...

ADM (4.3%, which was ~3% for years before):

https://www.macrotrends.net/stocks/charts/ADM/archer-daniels...

Bunge (3.77%, not increased compared to history):

https://www.macrotrends.net/stocks/charts/BG/bunge-global-sa...

The point is, complaining about greed in food businesses when they are historically low profit margin businesses, and still are for the most part (search Tyson/pilgrim/Hormel for meat, and other categories for similar profit margin trends) does not make much sense to me.

These are high labor, high liability, and low ability to scale businesses. It’s mostly their costs rising due to increased labor prices that causes price increases, and one you would expect with less and less poorer working age people in the world at the very bottom end.

I would reserve the term “greed” for software businesses with infinite scalability that not only deliver 20%+ profit margins year after year, but growth on top of that.

walterbell3• 2 years ago

Grocery store greedflation

Apologies for the imprecise statement, "Greedflation visible in grocery stores" would have been better. With the possible exception of grocery house brands, greedflated pricing was mostly set by grocery suppliers. As TFA noted, some grocery house brands have gained customers due to competitive pricing against branded suppliers.

https://www.theguardian.com/business/2023/dec/07/greedflatio...

food and commodities businesses Kraft Heinz, Archer-Daniels-Midland and Bunge all saw their profits far outpace inflation ... Four food companies – the listed suppliers Archer-Daniels-Midland and Bunge, plus the privately owned Cargill and Dreyfus – control an estimated 70%–90% of the world grain market.

Edit: thanks for the 3 data points. Will look for further analysis, beyond the 1350 companies in the study linked above. My only counterpoint is that grocery house brands and profit margins have been relatively stable, while some branded competitors have spiked prices. In theory, all should be subject to comparable labor and energy cost changes. I have also seen spiked prices inching back downwards on some groceries, in series with varying discounts, implying demand testing.

fuzzfactor11• 2 years ago

reserve the term “greed” for software businesses with infinite scalability that not only deliver 20%+ profit margins year after year, but growth on top of that.

Hey wait a minute, that's the kind of returns I like to do with a regular business, and I'm as non-greedy a non-consumer non-capitalist as you probably will find.

I'm just a plain entrepreneur by nature, and a respectable return is always a worthwhile target.

Software businesses can do way better than that, absolutely no greed should be necessary. And when greed does pop up (prevail?) it's so disgraceful.

When you do the math over the long run, the amount of upside is drastically limited by the presence of greed.

fuzzfactor11• 2 years ago

Not my downvote bacause I'm with you all the way that groceries have not had the margin to attract the greed bros very significantly.

The cash-flow sharks will circle ominously, but seldom bite groceries when there are fat things like real estate and pure financial operations with a much sweeter underbelly.

xnx3• 2 years ago

Consumers readily paid the increased prices for meals outside the home and sticking with brand names when they could've bought store brand. I'm glad people are finally wising up.

Simulacra2• 2 years ago

Especially with food delivery apps. If someone is willing to spend $35 to have a big Mac delivered, how much would they be willing to spend on the big Mac itself?

geor9e2• 2 years ago

Sometimes I wonder if Kroger Corporate saw the inflation headlines and said "nows our chance to milk our customers, without them blaming us, they'll blame Biden". I live between the Fillmore Safeway and the Nob Hill Trader Joes and the price difference is almost 2x. Cage free eggs are $9 vs $3.50, Block of cheese is $8 vs $3.50. Pound of hamburger is $13 vs $5. Something fishy is going on.

thwyforpriv824• 2 years ago

This is what my company did. I was in several Pricing meetings. “Competitors have increased 12% on these key items. We suggest to increase our prices 9%. Everyone good ? Great”. Major increases done on simply competitor action no research on the customer

WirelessGigabit• 2 years ago

I've actually increased my spending more than just the inflation / rising costs.

The current state of food processing allows for way too much adulteration, even in the simple foods.

Even yesterday I discovered that there is high quality pasta and low quality. The high quality pasta is made with seminola wheat. And on the lower quality one you get wha it's called "durum wheat (seminola)". Same name, but different processing. Th difference in quality is staggering.

fullshark• 2 years ago

This article seems to have no actual evidence for its premise outside random quotes from a few consumers. Is there evidence in name brands' quarterly reports?

wepple• 2 years ago

I started scrolling that article to read, and not far into it, 100% of my (mobile) screen was ads.

I’m not interested enough in what the article is trying to tell me to put up with that.

fragmede• 2 years ago

Please don't complain about tangential annoyances—e.g. article or website formats, name collisions, or back-button breakage. They're too common to be interesting.

https://news.ycombinator.com/newsguidelines.html

fuzzfactor11• 2 years ago

tangential annoyances

Timely reminder, when ads take up the whole screen, or anything like that at all, they are not tangential.

FooBarBizBazz3• 2 years ago

What I've seen, is people stop shopping at the nearby supermarket and start shopping at Aldi instead. This only works because Aldi (unlike all the American companies) is actually competing on price. The price difference is very significant.

firebaze• 2 years ago

Here in germany, there is a company producing milk, which expects 1.60€ per liter of milk. Regional, but non-"bio"¹.

On the other hand, there is a no-name brand, which delivers "bio" milk¹, for 1.05€ per liter.

During the high-inflation period, the regional "non-bio" milk was significantly less stocked than the "bio" milk.

This has turned around by now, the "non-bio" milk is quite obviously hard to sell (i.e. tags with "30% off due to expiry date" on it), while the "bio" milk is out of stock.

¹ "bio" is regulated quite strictly, cows must have quite a few m² to roam around freely in the open, amongst others

Consumers are increasingly pushing back against price increases – and winning

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