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在线翻译:
szdaily -> World Economy
Frugal Americans make it tough for food firms to raise prices
     2014-May-20  08:53    Shenzhen Daily

    REBECCA SUMROW is one of the U.S. customers food and restaurant company executives have in mind when they consider raising prices to offset higher costs as meat and milk soar to record highs.

    The 30-year-old from San Clemente, California, was out of work for a short time last year and saved money by moving in with her boyfriend and cutting back on clothes shopping and dining out. Though she now has a good job working for an investment firm, she’s maintaining her frugal ways.

    Consumers “have gotten really good over these last four years at stretching a penny,” said Pat Conroy, leader of the U.S. consumer products practice at Deloitte LLP. Referring to the recession, he said: “Our hypothesis was that this thing was going to leave a scar, not a bruise. So far, we’ve been right.”

    According to Deloitte’s annual survey of food shoppers released last week, 94 percent agreed they would remain cautious and keep spending at the same level even if the economy improves. That’s about the same percentage as it was in 2010 in the aftermath of the credit crisis.

    So Chipotle Mexican Grill Inc., McDonald’s Corp., Hillshire Brands Co. and Kraft Foods Group, all of which are raising prices, will be trying to retain consumers stuck with stagnant incomes and unhappy memories of the recession. Faced with little choice but to boost prices to cover the spike in costs for products like milk and meat, companies often are taking extra care to justify or soften the increases.

    Chipotle is one of the few companies expected to have the power to raise prices due to its popularity with higher income diners. The burrito chain is increasing menu prices this quarter, but only after giving customers a benefit by removing almost all food ingredients made with genetically modified organisms, or GMOs.

    “You’re hearing that they want to, but the question always becomes: Can it stick?” said Prudential Financial market strategist Quincy Krosby, referring to raising prices. “What the consumer has been very good about is going on strike.”

    That’s happening now in the dairy aisle. As U.S. milk prices go up, shoppers buy less, according to Dean Foods Co., the largest U.S. milk processor. Fluid milk industry volumes fell 2.1 percent in the first quarter, according to Dean.

    “There are certain price thresholds that we can’t cross, or it starts to impact the demand,” Dean chief executive Gregg Tanner said on a conference call with analysts last week. “We experienced additional softness in our volumes during March and April.”

    The wholesale price for beverage milk was about US$2.10 per gallon in May, a record, and up 38 percent from a year ago, according to dairy analyst Jerry Dryer. In March, retail milk prices were up only 6.5 percent, suggesting that retailers are eating much of the cost increase, he said.

    U.S. consumer prices rose 1.5 percent in March from a year earlier, led by food and housing rental costs. An index of inflation tracked by the Federal Reserve is running even lower at 1.2 percent, against the central bank’s target of a 2 percent inflation rate.

    Many consumers are still struggling in a tough labor market. Labor force participation remains depressed. Private-sector wages were unchanged in April and over the past 12 months have averaged monthly increases of just 0.16 percent.

    “There’s still a large swath of the population that just doesn’t have the spending power,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.

    (SD-Agencies)

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