Kroger Exec Says Grocery Prices Are Finally Going Down—Here's When
Your grocery receipt will be a little lower, company executives predict.
For much of the year, higher prices have been the norm, necessitating the need to budget or pick up couponing as a hobby. We may have learned to live with inflated prices, but that doesn't make them any less frustrating, especially when it comes to the weekly necessity of buying groceries. However, while it once seemed like there was no end in sight, a Kroger executive says relief is on the horizon. Read on to find out when the company predicts grocery prices will finally go down.
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Kroger is predicting a more "typical" year in 2024.
During a Nov. 30 earnings call, Kroger executives discussed impending "deflation" in 2024, which would provide some relief with grocery prices.
"I think our view right now, we recognize we don't have the perfect crystal ball, and we'll continue to watch and evaluate how we see the outlook for next year," Gary Millerchip, Kroger's chief financial officer, said on the call. "But overall, most of the data that we're seeing would tend to point toward more of a typical year next year."
In terms of food inflation rates, Millerchip said Kroger anticipates that to be "in the low-single-digit rate" in 2024. Walmart CEO Doug McMillon also chimed in on this "deflationary environment" during a Nov. 16 earnings call.
"We think we may see drug, grocery, and consumables start to deflate in the coming weeks and months," McMillon said.
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Kroger said inflation has already slowed.
Kroger's third-quarter results were weaker than expected, with sales falling slightly from last year, Grocery Dive reported. However, according to Millership, this was impacted by the fact that "overall sales continue to be affected by industrywide disinflation."
"Inflation has slowed down a little bit faster than we expected," Kroger CEO Rodney McMullen said during a Nov. 30 episode of CNBC's Squawk on the Street, citing this as one of the key reasons the company also slashed its expectations for sales growth this year.
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But don't expect inflation to be gone for good.
According to CNN, the pace of food inflation was slowing last month, but food prices in general were still trending upward. Illustrating this, McMullen noted that overall, Kroger still expects to see "slight inflation" during the remainder of 2023 and into 2024.
"If you look in the grocery area, there's more deflation there," McMullen said during the CNBC interview. "If you look at eggs and things like that, you certainly see deflation there. But when you look at meat, we expect—especially beef—that inflation will be there. So when you blend it all out, we would expect slight inflation through the balance of the year. That's also what we would expect for 2024 as well."
In terms of other lower prices, in November, CNN noted that prices for staples like bacon, seafood, and eggs were down, and McMillon added that chicken, seafood, and dairy prices were also lower.
There are some potential drawbacks.
While the idea of spending less at the grocery store is certainly appealing, there can also be negative repercussions for the economy, CNN reports.
When prices go down, it signals decreased demand, and if you're anticipating a price drop, you might hold off on buying something. With a large portion of people doing this and spending less, it can spur major events like layoffs and even a recession, per CNN.
However, Business Insider reported that the recent downtrend in inflation hasn't resulted in either of these scenarios. When the decline happens without unemployment and a recession, economists call the situation "immaculate disinflation."
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