Benny and the Inkjets

Discussion in 'Wall St. News' started by Tsing Tao, Oct 21, 2010.

  1. Tsing Tao

    Tsing Tao

    it would appear that benny is going to get his inflation...or rather WE are going to get his inflation, sooner that we thought.

    this follows yesterday's note on how unilever was taking price increases on a broad range of portfolio items.

    General Mills Raising Prices On Some Cereals, Baking Brands

    By Anjali Cordeiro and Paul Ziobro, Of DOW JONES NEWSWIRES

    NEW YORK -(Dow Jones)- General Mills Inc. (GIS <http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=GIS&selected=GIS> ) is raising prices on some cereals and baking products, a clear signal that food makers will pass some pressure from higher commodity costs on to retailers and consumers.

    The company is taking a "low-single-digit" percentage price increase on some of its cereals, a spokeswoman said. The price increase, which the company will make effective Nov. 15, will affect about one quarter of its cereal business in the U.S., she said. This would be the first price increase on many of these cereal brands in three-and-a-half years. The company didn't disclose the names of the brands that will be affected.

    General Mills is also raising prices on some baking products including flour and baking mixes. Those changes will on average amount to a mid-single-digit price hike on certain products in the baking category. Higher input costs necessitated the changes, the spokeswoman said. The company has been using productivity improvements and cost cuts to offset raw material pressures and will keep doing so, she said.

    Kraft Foods Inc. (KFT <http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KFT&selected=KFT> ) is also starting to raise some prices, people familiar with the matter said Wednesday, though the scope of its hikes wasn't immediately clear. A Kraft spokesman declined comment Wednesday, but the company recently said it would selectively raise prices on some brands to offset commodity costs.

    The moves by General Mills and Kraft could set the stage for the first broad wave of price increases by food makers since 2008, actions that drove profits and stocks for industry players higher. Food companies have been offering big promotions to entice shoppers who cut back in the recession, but the more-recent increases in commodity prices is pushing many of these companies to weigh raising prices.

    "The prospect of higher price points would be an enticing one," Barclays analyst Andrew Lazar said in a research note.

    New price hikes would come at a time of widespread caution among consumers, who are still jittery about the pace of the economic recovery.

    The higher prices could put some retailers in a bind. Major supermarket operators, also cautious about the consumer recovery, will have to decide whether to raise shelf prices or sacrifice profits.

    Kroger Co. (KR <http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=KR&selected=KR> ) and Safeway Inc. (SWY <http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SWY&selected=SWY> ) executives have said in recent weeks that they expect to be able to pass along such increases, although other chains are engaging in another round of price cuts at the store level to keep customers coming in.

    Supervalu (SVU <http://quotes.nasdaq.com/asp/SummaryQuote.asp?symbol=SVU&selected=SVU> ) on Tuesday said it was going to run another round of price cuts, a direct response to declining sales and market share.

    The new strategy comes as a major supplier in the past week told Supervalu that it will raise prices "across the board," Supervalu CEO Craig Herkert told analysts Tuesday. A Supervalu spokesman declined to comment on which supplier warned the company of higher prices.
     
  2. Never fear. CPI will be adjusted accordingly. It doesn't matter if all the agricultural commodities are up 20%+ this year, either. Official inflation will remain subdued per Bennie & the Boyz.
     
  3. S2007S

    S2007S

    Raising prices on cereal???

    They are already high enough.

    Some boxes of cereal are nearing $6.00 a box.
    Wages aren't even moving yet the price of goods are going to start to skyrocket.

    Yep no inflation, wait till it really starts getting out of control and inflation starts running wild, you haven't seen nothing yet.

    Go bubble ben bernanke.
     
  4. They dont care if commodity prices have surged.. grains...sugar...cotton...coffee...oil... price of goods have and will go up to not only offset companies higher prices for commodities but when they go down we wont see the prices of goods go down and that is when companies will cash in. Remember oil was at $34 a barrel not too long ago - we were told that was a tax break. what about now, HIGH commodities/weak dollar is a tax increase?
     
  5. I remember the bumper stickers that said something like “When Bush came in office, gas was $X.XX per gallon.”

    Of course, those were popular around the time of peak oil/gas prices. In reality, oil was around $28/b when Bush was inaugurated and around $43/b when Obama took over 8 years later.

    Now oil is back in the $80s…in less than 2 years. But don’t expect to see any bumper stickers.
     
  6. rew

    rew

    Yup, they'll just give us the "core" inflation, which doesn't include food or energy. Core inflation is very useful for those of us who don't need to eat or use energy. But my favorite idiocy about inflation calculations is that they leave out the biggest expense of all -- taxes. I spend more on taxes than I do on housing, food, clothing, and utilities put together. But taxes could double and the government would still tell me there's no inflation.