Milk prices up 26%. Eggs up 40%! After nearly two decades of inflation-resistant food prices, consumers are approaching the check-out counter with fear and trepidation.
The Kansas City Fed says that "today's momentum in food prices may be signaling a new erea of even higher food prices." While they expect food price inflation to ease in '08, they see an increase well above the ten-year average of 2.6%. The strongest price pressures are likely to come from fats and oils, cereal, and bakery products.
Likely to do well in this economic environment: house/store/off/generic brands and private labels. Susceptible to buyer flight: organic/"whole"/"natural" foods.
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