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Posted on April 22, 2022 @ 09:31:00 AM by Paul Meagher
One of the biggest concerns alot of people in North America have now is inflation. The rise in gas prices is one of the most obvious signs of inflation which has knock on inflationary effects for many other consumer items. Fertilizer prices have gone up significantly which will likely have effects on the price of food; if not, farmers could be going out of business. Supply chain issues are causing goods like automobiles to become scarce (i.e., lack of semi-conductors to build new vehicles) which is leading to increased prices for existing inventory. Real estate prices are also seeing inflationary pressures due to lack of supply, low interest
rates, investment buying and a multitude of other factors. The rise in costs also puts pressure on businesses to pay higher wages which is an inflationary cost for businesses as well.
The consumer is hearing news about rising inflation and starting to adjust to the new reality. Is this new reality similar to the new reality that the pandemic brought us and which we had to adapt to in many ways? There were winners and losers that came out of that new reality. Are there going to be new winners and losers if inflation continues to rise? Will new business arise to help businesses and consumers save money?
The way items are priced is a critical factor that will be important for businesses to watch. There is a natural temptation to increase prices but if your product or service is more discretionary then necessary, you might be pricing yourself out people's willingness to pay. Restaurants have to thread the needle between dealing with their rising costs while recognizing that customers might decide not to eat out as a way to save money.
Inflation, like the pandemic, is not a positive reality to have to adapt to but adapt we must. Some businesses may even find a way to thrive in this new reality because they are offering solutions to helping low and middle class consumers save money. If you can do that without compromising too much on quality then you might have a winning proposition.
This blog was inspired by Joel Salatin & Dr. Sina McCullough's recent video discussing the strategies they are using to fight food inflation while eating healthy.
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