Will the prices really go down?

[cruising spud]

This is what our local grocery store does-takes a box of cereal at $3.99. Raises the price to $4.99. Six months later, lowers the price to $4.79 and advertises-New, Lower Price!!

 

[Starport Seven-Five]

Highly unlikely and if they do it will be very gradual.

The great thing about competition is as one grocery store chain wants more sales they will lower their prices (thanks Walmart and Winco) and the others will need to follow or risk losing their market share. It won't happen all at once but I do expect to see some lower prices. Beef will take longer to drop I suspect.

That's assuming you have competition. Where my parents live there is 1 drug store, a dollar general, and a grocery store. The prices I saw in that grocery store were significantly higher than what I was used to but they get away with it because the nearest competition is 15 minutes away.

We ate at a McDonalds in September. We rarely do and it's been many, many years since we set foot in one. There were kiosks to place your order. So, sure people who work there can demand much higher pay but then they just cut half the jobs that require a human.
At least Chick Fil A still has real people that take your order.

McDonald's has been rolling those out for a while. Google has mixed results but sounds like the first kiosks were rolled out in the early 2000s. Businesses will always pursue the lowest cost option and those costs go beyond labor (absenteeism, training, theft, etc).

I doubt it accounts for half the jobs at a typical McDonald's though. Most fast food places I have seen have 1-2 people working the counter and way more than that making food, prepping orders, working the drive through, cleaning the dining room, etc.

 

[barkley]

if anyone is interested in tracking how this fleshes out and shops walmart-if you do online ordering (delivery or pickup) and have a credit card saved then in addition to all of your online purchases your in store purchases (that you use the same card for) show under your account history. if you go to buy say a bottle of ranch dressing you can literally pull up every instance of purchasing it going back a year or two and see how much you've paid each individual time. it can be rattling.

I have to say though, I was pleasantly surprised last night when I went on target to order a holiday food item I buy every year and figured it would have gone up significantly in price (all the individual componants in it certainly have)-not bad, less than a 2% increase year to year.

 

[disneyseniors]

Grocery prices are getting lower on certain higher items, gradually. It's going the right way

 

[Lumpy1106]

The inflation started back in 21/22. Tariffs have been around about 7 months and aren't the cause of the problem. This started years ago. Supply issues and government debt have caused cause inflation. The increase of debt over the last five years has put a lot of upward pressure on prices. Government debt has gone from 27 trillion in 2019 to 38 trillion now.

Another factor is the increase in wages. Fast food workers in my state have gone from making 10 dollars a hour in 2019 to 20 dollars an hour now. Now fast food places are closing down because nobody can afford to eat there.

^THIS
Fast food jobs were NEVER supposed to provide a "living wage". They are transitory positions that high school and college kids can do while they are learning to do something else. They are on their parents' insurance so no need to provide benefits. If you really love it you work your way into management in which case you DO make a living wage and you do get benefits. That's the boss, NOT EVERYONE. The people making these feel-good laws aren't thinking far enough ahead; if the burger costs $15, the kid making $20/hr to flip it still can't afford rent as the costs for everything will follow suit. It's a death-spiral of inflation if they keep doing it, so please stop.
Back on subject, the tariffs are a negotiating tool and nothing else. If say Canada has a tariff and the US does not, the US cannot bargain to get Canada to lower their tariffs (i.e. cannot say, "we'll lower ours if you lower yours"). It's just business, and no, prices will not go up nearly as much as you've been led to believe - because the US will negotiate to ultimately lower the prices or bring down unemployment by bringing jobs back on US soil. Either way, it's an improvement.

 

[SL6827]

No. My Mother said many years ago that prices don't go back down. I read somewhere that Kroger executives admitted in court that Kroger raised prices higher than inflation.

Yes. Greedflation. That will never go down.

 

[DCLMP]

Energy prices are increasing some say it's a result of the data centers. Increase in property taxes, insurance, health care etc. The only thing in my life that has gone down is my gas bill. It's been running around 20 dollars a month. It used to be around 50.

As far as fast food places go it's wages and the cost of food. I just paid 30 dollars for 5 pounds of ground beef. It does seem like fast food prices are out of line with restaurant prices. We could eat a Chilis or other chain for about the same price as Chipotle, five guys, etc.

 

[Starport Seven-Five]

Fast food jobs were NEVER supposed to provide a "living wage". They are transitory positions that high school and college kids can do while they are learning to do something else. They are on their parents' insurance so no need to provide benefits. If you really love it you work your way into management in which case you DO make a living wage and you do get benefits. That's the boss, NOT EVERYONE.

This argument falls apart if the restaurant wants to be open during school hours though. Not many high schoolers available to work the Wednesday 1pm shift.

I feel like in many areas we are over saturated with these type of restaurants so it would be good to see some consolidation. I live in the suburbs and we have 6 McDonald’s stores within a 5 mile radius of our house. If a couple went under people would largely migrate to buying from a different store. Increased volume would make the remaining stores more sustainable while paying higher wages.

The people making these feel-good laws aren't thinking far enough ahead; if the burger costs $15, the kid making $20/hr to flip it still can't afford rent as the costs for everything will follow suit. It's a death-spiral of inflation if they keep doing it, so please stop.

The price of food was estimated to increase 3-7% if wages went up to $20/hour:
https://www.pacificresearch.org/how-much-will-your-favorite-hamburger-cost-after-minimum-wage-hike/

I don’t consider that “death spiral” significant.

 

[Lumpy1106]

This argument falls apart if the restaurant wants to be open during school hours though. Not many high schoolers available to work the Wednesday 1pm shift.

I feel like in many areas we are over saturated with these type of restaurants so it would be good to see some consolidation. I live in the suburbs and we have 6 McDonald’s stores within a 5 mile radius of our house. If a couple went under people would largely migrate to buying from a different store. Increased volume would make the remaining stores more sustainable while paying higher wages.


The price of food was estimated to increase 3-7% if wages went up to $20/hour:
https://www.pacificresearch.org/how-much-will-your-favorite-hamburger-cost-after-minimum-wage-hike/

I don’t consider that “death spiral” significant.

The cost has gone up significantly more than 7% in CA, but then minimum wage is not the only cost that has gone up for the franchise owner. Gas, Electricity, property rent, all if this is affected when wages go up across the board. Not only that, but when minimum wage goes up but my middle class income does not, I'm going to spend a lot less time eating out (and that's true). If the franchise owner wants to survive he's going to either need to raise prices or cut staff in order to make that happen if he has fewer customers.

Nevermind that though - are you really arguing that higher unemployment is a good thing? Really? Because, that's what is going to happen if you put a couple of franchises out of business. You know people own those franchises, right? It's not some big fast food monopoly - when a franchise goes under someone, a real person, is going bankrupt. I much prefer having as many options as possible and having the franchise owners have to offer higher wages to get the best employees - rather than forcing them to offer everyone the maximum they can and having higher bankruptcies and unemployment (and yes, higher food costs for me, the consumer).

Just me?

 

[DCLMP]

The cost has gone up significantly more than 7% in CA, but then minimum wage is not the only cost that has gone up for the franchise owner. Gas, Electricity, property rent, all if this is affected when wages go up across the board. Not only that, but when minimum wage goes up but my middle class income does not, I'm going to spend a lot less time eating out (and that's true). If the franchise owner wants to survive he's going to either need to raise prices or cut staff in order to make that happen if he has fewer customers.

Nevermind that though - are you really arguing that higher unemployment is a good thing? Really? Because, that's what is going to happen if you put a couple of franchises out of business. You know people own those franchises, right? It's not some big fast food monopoly - when a franchise goes under someone, a real person, is going bankrupt. I much prefer having as many options as possible and having the franchise owners have to offer higher wages to get the best employees - rather than forcing them to offer everyone the maximum they can and having higher bankruptcies and unemployment (and yes, higher food costs for me, the consumer).

Just me?

You nailed it. The minimum wage has gone up, but most of us in the middle class and upper middle class haven't got the pay increases to keep up with the prices of anything.
We have cut eating out by about 90%. What used to grab lunch out 2 to 3 times a week. Now it's maybe once a month or less. I don't think I'm alone here.

 

[ruadisneyfan2]

This argument falls apart if the restaurant wants to be open during school hours though. Not many high schoolers available to work the Wednesday 1pm shift.

I feel like in many areas we are over saturated with these type of restaurants so it would be good to see some consolidation. I live in the suburbs and we have 6 McDonald’s stores within a 5 mile radius of our house. If a couple went under people would largely migrate to buying from a different store. Increased volume would make the remaining stores more sustainable while paying higher wages.


The price of food was estimated to increase 3-7% if wages went up to $20/hour:
https://www.pacificresearch.org/how-much-will-your-favorite-hamburger-cost-after-minimum-wage-hike/

I don’t consider that “death spiral” significant.

College kids work them too and they don't have a typical school schedule that HS kids have. When I worked in a dry cleaners during HS and college, we had a lady who was a retired widow who lived next door and would come work a few hours per day just to have something to do. Walmart & Costco have a lot of employees like this doing simple jobs like greeting customers or checking receipts on the way out.

 

[DCLMP]

This argument falls apart if the restaurant wants to be open during school hours though. Not many high schoolers available to work the Wednesday 1pm shift.

I feel like in many areas we are over saturated with these type of restaurants so it would be good to see some consolidation. I live in the suburbs and we have 6 McDonald’s stores within a 5 mile radius of our house. If a couple went under people would largely migrate to buying from a different store. Increased volume would make the remaining stores more sustainable while paying higher wages.


The price of food was estimated to increase 3-7% if wages went up to $20/hour:
https://www.pacificresearch.org/how-much-will-your-favorite-hamburger-cost-after-minimum-wage-hike/

I don’t consider that “death spiral” significant.

Food prices have gone up more than 3-7% and it is a death spiral for those in the low, middle and even upper middle class. Your not in those classes as evidenced by your posts on other threads. Franchises shutting down means job losses and bankruptcies. It's never a good thing. It's even more complicated when you get into the banking ramifications.

As far as your high school argument. Not applicable. Most of those jobs are held by college age kids, young adults and few high schoolers. There are no set hours for college kids. Most classes are available online if needed.
If the middle class can't afford to eat at fast food restaurants the jobs won't exist anyway.

 

[Starport Seven-Five]

The cost has gone up significantly more than 7% in CA, but then minimum wage is not the only cost that has gone up for the franchise owner. Gas, Electricity, property rent, all if this is affected when wages go up across the board. Not only that, but when minimum wage goes up but my middle class income does not, I'm going to spend a lot less time eating out (and that's true). If the franchise owner wants to survive he's going to either need to raise prices or cut staff in order to make that happen if he has fewer customers.

Gas, electricity, etc have definitely gone up and make it hard to isolate the impact of labor alone. We have seen fast food costs increase significantly here in Michigan as well and our minimum wage is significantly less than California.

Nevermind that though - are you really arguing that higher unemployment is a good thing? Really? Because, that's what is going to happen if you put a couple of franchises out of business.

In a 4% unemployment environment I am fine with losing a few bad jobs if it means the remaining ones are actually decent.

You know people own those franchises, right? It's not some big fast food monopoly - when a franchise goes under someone, a real person, is going bankrupt. I much prefer having as many options as possible and having the franchise owners have to offer higher wages to get the best employees - rather than forcing them to offer everyone the maximum they can and having higher bankruptcies and unemployment (and yes, higher food costs for me, the consumer).

Just me?

I am concerned for the workers over the franchise owners. May be a controversial take but If a franchise owner has to rely on exploitation of their workers to stay profitable they shouldn't be in business.

Food prices have gone up more than 3-7% and it is a death spiral for those in the low, middle and even upper middle class. Your not in those classes as evidenced by your posts on other threads.

We slot into the upper middle class based on income definitions. We just have set up our lives to live well below our means so we get a lot of value out of that.

And considering your posts about going on 37 cruises I am sure you're not in the lower income classes either.

 

[Starport Seven-Five]

College kids work them too and they don't have a typical school schedule that HS kids have. When I worked in a dry cleaners during HS and college, we had a lady who was a retired widow who lived next door and would come work a few hours per day just to have something to do. Walmart & Costco have a lot of employees like this doing simple jobs like greeting customers or checking receipts on the way out.

As far as your high school argument. Not applicable. Most of those jobs are held by college age kids, young adults and few high schoolers. There are no set hours for college kids. Most classes are available online if needed.
If the middle class can't afford to eat at fast food restaurants the jobs won't exist anyway.

I am not sure where the idea that college kids don't have adults bills is originating. I had rent, groceries, etc while in college while also trying to pay for books/tuition. Sure many of them have student loans but that shouldn't be an excuse to pay them low wages.

 

[DCLMP]

I am not sure where the idea that college kids don't have adults bills is originating. I had rent, groceries, etc while in college while also trying to pay for books/tuition. Sure many of them have student loans but that shouldn't be an excuse to pay them low wages.

It's better to have a lower wage than no job which is where were headed.

 

[DCLMP]

Gas, electricity, etc have definitely gone up and make it hard to isolate the impact of labor alone. We have seen fast food costs increase significantly here in Michigan as well and our minimum wage is significantly less than California.

In a 4% unemployment environment I am fine with losing a few bad jobs if it means the remaining ones are actually decent.

I am concerned for the workers over the franchise owners. May be a controversial take but If a franchise owner has to rely on exploitation of their workers to stay profitable they shouldn't be in business.

We slot into the upper middle class based on income definitions. We just have set up our lives to live well below our means so we get a lot of value out of that.

And considering your posts about going on 37 cruises I am sure you're not in the lower income classes either.

I never claimed to be lower income, but we are middle class. We are also gen X that didn't have college debt, bought or house 30 years ago, have some assets etc. We will be able to take a couple of cruises next year, not because of our income, but because we have assets....so basically were old. I would not want to have our income and be trying to buy a house or start a family right now. Most of our cruising and traveling was done when prices were much lower.

Judging from some of your comments I think you are going to be very surprised by the coming recession.

I would love to hear how franchise owners exploit there workers...that sounds like a good story.

 

[barkley]

I was just playing with a few of those 'how much house can I afford?' calculators and I don't know when it came to be but it's very disconcerting that they all now have auto default amounts of what they presume to be the average home buyer's monthly 'debt' (which they define as minimum credit card payments and/or minimum student loan payments). if we had the amount of the type of debt that would garner many, many hundreds of dollars a month in just the minimum monthly payment I can't imagine being in a financial position to buy a home (student loans I understand-the credit cards would kill me).

 

[DCLMP]

I was just playing with a few of those 'how much house can I afford?' calculators and I don't know when it came to be but it's very disconcerting that they all now have auto default amounts of what they presume to be the average home buyer's monthly 'debt' (which they define as minimum credit card payments and/or minimum student loan payments). if we had the amount of the type of debt that would garner many, many hundreds of dollars a month in just the minimum monthly payment I can't imagine being in a financial position to buy a home (student loans I understand-the credit cards would kill me).

Our mortgage was set at 804 a month, but to buy my house now the mortgage would be 3007.21 and that's with 20% down. We would probably qualify, but we could not pay that and have any kind of enjoyable life. I certainly wouldn't be going on any cruises, or any type of vacation.

 

[ruadisneyfan2]

Our mortgage was set at 804 a month, but to buy my house now the mortgage would be 3007.21 and that's with 20% down. We would probably qualify, but we could not pay that and have any kind of enjoyable life. I certainly wouldn't be going on any cruises, or any type of vacation.

The little house our ds25 bought in March would have cost $100,000 less if he had bought it 2 years earlier according to Zillow's chart of the home's value over the years. Of course he was not ready to buy 2 years prior but dang that is ridiculous. He also insists on a 15-year mortgage because it costs so much more in interest to have a 30 year. He says he'd rather suffer now than drag it out until he's "old". He has to work OT to come up with money for fixing up the house so that's coming along slowly.

When he lived at home, he'd buy an annual pass that gives entry to various ski resorts in the Poconos, VT, etc. He says he doesn't have the time or the money for that this year.
When dh and I bought our house, it was also a fixer upper with good bones and he could do the work but he had me to help do the bills, cleaning, cooking and grocery shopping so he could focus on the remodeling projects. For ds, it's all on him and he's trying to work OT. Something's gotta give and I only hope it's not his mind.
Dh forgets all of this when he wants to go work on the house every Saturday & Sunday all day and says, "What do you mean you need to clean? Do that on weekdays." Lol. The kid works 10-hour days and comes home and cooks. How much more should he fit into one day?
He didn't want to wait until "someday when he gets married" because who knows if/when that will ever happen and he didn't want to pay rent which is such a money suck that it makes it even harder to save for a down payment.

I feel bad for young people these days.

On a positive note, if he stays there he'll be mortgage-free at 39.

 

[barkley]

He also insists on a 15-year mortgage because it costs so much more in interest to have a 30 year. He says he'd rather suffer now than drag it out until he's "old". He has to work OT to come up with money for fixing up the house so that's coming along slowly.

I totally understand his mindset on paying off sooner vs later. we considered a 15 year when we bought our current home but we had already experienced one instance in our marriage with a drastic unexpected lowering of income and that left a mark on me mentally budgeting wise. I did'nt want us put into a situation where a drastic income reduction OR a major unexpected expense put up on thin ice (or drowning) so we opted for a 30 year with no prepayment penalty but paid like we were doing a 15 (always applying the extra to principal) and ended up throwing more at it when we could paying it off well before the 15 year mark.

Our mortgage was set at 804 a month, but to buy my house now the mortgage would be 3007.21 and that's with 20% down. We would probably qualify, but we could not pay that and have any kind of enjoyable life. I certainly wouldn't be going on any cruises, or any type of vacation.

the sales prices of homes in our neighborhood have gone up stupidly high ever since the pandemic had people wanting to live ruraly. I can't imagine the kind of mortgages people have when ours would be considered in the middle price range and would run (with 20% down) over $4500 a month. I just would not feel comfortable knowing I had that kind of financial obligation.